Property Investment in Lombok: Lower Costs, Higher Potential Than Bali
When Bali’s property market has become saturated, more international investors are turning their gaze east to Lombok. For Europeans seeking growth, affordability, and untapped potential, Lombok presents a compelling proposition: lower entry costs relative to Bali, and stronger upside potential as tourism, infrastructure, and demand follow the momentum.
But on the road from interest to investment lies a maze of Indonesian land law, corporate structuring, tax, and due diligence. As a legal consultant specializing in investment in Indonesia, this article will guide you step by step from the regulatory framework to how to structure your deal so you can invest in Lombok property with confidence.
Why Lombok? The Case for Strategic Diversification
- Lower Cost per Square Meter
Compared to Bali’s hotspots (Seminyak, Canggu, Ubud), property and land in Lombok are still relatively affordable. For instance:
- In Bali, prime land parcels can go for IDR 600–800 million per 100 m².
- In Lombok, land prices in many emerging zones currently range from IDR 95–300 million per 100 m², depending on accessibility and proximity to tourism nodes.
- Near Mandalika — the development zone with major government backing — land can reach around IDR 350 million per 100 m², which is still lower than many Bali equivalents.
Because your capital can stretch farther, you can buy more land or build more units for the same investment. This gives you leverage.
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Tourism & Infrastructure Growth Momentum
Lombok is gaining strong government and private-sector attention as a new tourism hub. Projects such as Mandalika (the integrated resort area) are intended to position Lombok as a world-class destination.
As infrastructure (roads, airport capacity, utilities) improves, previously remote areas become viable for visitor accommodations, villas, or boutique resorts. Many investors are entering early to capture “first mover” advantage in zones that may later become prime.
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Greater Upside & Less Saturation
Because Bali is already densely developed (especially in popular zones), competition is high and yields for rentals or resale growth may be more constrained. In Lombok, the “market ceiling” is still far ahead. Early entrants can benefit from rising land values, tourism spillover, and rental demand before the wave becomes mainstream.
Legal & Regulatory Fundamentals for Foreign Investors
Instead, foreign investors must use legal structures and specific title types:
- Hak Guna Bangunan (HGB, Right to Build / Use for a fixed period) — This is the most secure, business-oriented structure for owning and developing land. A foreign-owned company (PT PMA) can hold HGB.
- Hak Pakai (Right of Use / Right to Use) — This is a more limited right, often used for residential or purpose-limited uses. It can be suitable when buying a building already existing.
- Leasehold / Lease agreements (Hak Sewa) — foreigner leases the land for a period (often 25–30 years, with renewal clauses) and uses the building.
In practice, many foreign investors use a combination of PT PMA + HGB or Hak Pakai to have the maximum legal certainty.
Comparative Summary: Lombok vs Bali
| Factor | Bali | Lombok |
| Entry cost (land/build) | High, very competitive | Lower, more headroom |
| Saturation | High — many developed tourist zones | Lower — emerging opportunities |
| Regulatory complexity | Established but highly competitive | Still evolving but with room to structure advantageously |
| Upside potential | More modest incremental growth | Greater runway for appreciation |
| Infrastructure growth | Mature, incremental improvement | Many new projects with spillover benefits |
| Competition | Crowded, high marketing cost | Less crowded, ability to capture premium niche |
Lombok represents a golden opportunity for foreign investors, especially Europeans, seeking a combination of lower entry cost, untapped upside, and a path into Indonesia’s rising tourism and real-estate markets. While Bali remains iconic and mature, it is increasingly saturated and expensive. By contrast, Lombok is still in the stage of rapid development, with headline projects like Mandalika putting it firmly on the map.
However, success lies not just in choosing Lombok but in structuring your investment wisely. The legal constraints around foreign ownership in Indonesia are real, but with the right corporate structures (PT PMA + HGB or Hak Pakai), careful due diligence, and local expertise, you can build a robust, future-proof property investment.
Ready to explore your Lombok real estate path?
We at Indoned Consultancy are here to help you navigate every legal, financial, and strategic step from structuring to due diligence, from licensing to exit strategy. Contact us now for a free consultation, and let’s unlock Lombok’s real estate potential together.
Disclaimer
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
