Mortgages dominate Bali home purchases as prices edge higher

Denpasar — Mortgages remain the main way to buy primary-market homes in Bali, with Bank Indonesia’s local office reporting that kredit pemilikan rumah (KPR) dominates residential transactions as prices edge higher.

In mid-August 2026, the head of Bank Indonesia’s Bali representative office, Achris Sarwani, said results from the central bank’s Residential Property Price Survey (Survei Harga Properti Residensial/SHPR) showed Bali’s residential property price index rising and confirmed that KPR was the leading financing scheme for house purchases in the province, according to reports by Bisnis Indonesia and Literasi Post.

Bisnis Indonesia cited Sarwani as saying that the index for Bali increased by 1.02% year-on-year in the second quarter of 2026, up from 0.87% in the first quarter, reflecting higher prices for medium and large houses. Medium houses were defined as having a building area of 36–70 square metres, while large houses exceeded 70 square metres.

Literasi Post reported that survey results for Bali showed 67.6% of home purchases in the province were made using KPR, underscoring the dominance of mortgage financing in the local primary residential market.

Prices rise on cost pressures

According to Bisnis Indonesia’s account of the SHPR results for Bali, Sarwani linked the increase in residential prices mainly to higher production costs.

He pointed to rising construction material prices as the primary source of pressure, followed by higher labour costs.

The survey also noted that licensing expenses, fuel prices and the addition of housing and social facilities contributed to the upward pressure on residential property prices.

On social media, Bank Indonesia’s Bali office reiterated that Bali’s residential property price index rose 1.02% year-on-year in the second quarter of 2026, compared with 0.87% in the previous quarter, and described this as evidence of continued cost-related pressure on housing.

Mortgage access and buyer challenges

While KPR is the dominant route to ownership, survey respondents indicated that mortgage access still faces significant constraints.

Nationally, Bank Indonesia’s SHPR assessment for the second quarter of 2026 highlighted challenges to primary-market sales that also affect developers and buyers in Bali, including higher prices for building materials, mortgage interest rates, complex permitting, high down-payment requirements and tax burdens.

These factors influence how much income households must commit before and after purchasing a home.

A mortgage helps spread costs over time, but the SHPR and local statements do not provide detailed lending rates, loan tenors, average transaction prices, household incomes or typical monthly instalments for Bali, making it difficult to quantify how much of a middle-income household’s income is absorbed by repayments.

The available reports also do not specify whether the 67.6% figure for Bali includes government-backed schemes, commercial mortgages, subsidised loans or other types of KPR, treating KPR as a broad category of home financing rather than a single product.

Developers rely on internal funding

From the supply side, the national SHPR release for the second quarter of 2026 shows that developers across Indonesia, including those active in Bali, largely fund residential projects using their own capital.

Bank Indonesia reported that internal company funds accounted for 73.28% of developer financing needs, followed by bank loans, customer advances and loans from non-bank financial institutions.

Literasi Post’s coverage of the Bali segment of the survey cited a similar pattern, with 56.6% of residential development financing in the province coming from internal funds.

That reliance on internal capital helps explain why construction can continue even when developers report demand-side constraints.

However, the available information does not show in detail how developer financing costs translate into sale prices at district level or whether those costs are passed directly to buyers.

Outlook for Bali’s housing market

Based on national SHPR findings and local commentary, Bank Indonesia expects land and residential property prices to continue rising in the third quarter of 2026.

The Bali office has communicated that KPR is likely to remain the main financing channel for homebuyers in the province.

At the same time, developers continue to cite cost pressures, mortgage rates, land availability, taxes and down-payment requirements as obstacles to stronger primary-market sales.

Sources

• Bisnis Indonesia – Survei BI: Harga Properti di Bali Naik 1,02% pada Kuartal II/2026
• Literasi Post – Harga Rumah Tipe Menengah dan Besar di Bali Melonjak
• Bank Indonesia – Survei Harga Properti Residensial Triwulan II 2026 (news release)
• Bank Indonesia KPw Bali – X post on Bali residential property prices Q2 2026
• CNBC Indonesia – Penjualan Rumah Masih Seret, Harga Cuma Naik Tipis