22 November 2023
When we think of investment, there is one element that will always spring to mind: risk. Markets are volatile and unpredictable, and it can be difficult to make the most informed decisions when tips and recommendations often contradict each other.
When we think of investment, there is one element that will always spring to mind: risk. Markets are volatile and unpredictable, and it can be difficult to make the most informed decisions when tips and recommendations often contradict each other. This irrefutable fact of investment explains why, whether you’re a novice or a veteran investor, property investment is often considered the way to go, with it being generally perceived as having less risk and more potential for reward.
Expanding your portfolio into the property market is a top-of-mind option for many investors. Its tangibility, tax benefits and the possibility to obtain a passive income through receiving rent makes it a popular investment opportunity with many. While it is seen to be a less volatile investment compared to shares, it is still subject to value changes within the market.
For example, after an extended period of market strength, the average Australian residential property prices fell 3% in the first quarter of 2019, according to stats released by the ABS in June, with total property prices in metro and suburban Melbourne falling by closer to 4% in total.
ABS Chief Economist, Bruce Hockman said: “A continuation of tight credit supply and reduced demand from investors and owner-occupiers has contributed to weakness in property prices in all capital cities this quarter.”
It has been popular to invest in domestic property in previous years, but now maybe a little less so. Australian property prices are falling, not rising. However, what most Australian property investors fail to recognise is that property investment here on our own soil is not the only option, and may not even be the best one. There are growing opportunities abroad which are not too far from home.
Some investors looking beyond more traditional opportunities have been drawn to the exciting property area of Lombok. A rapidly growing tourism rival to Bali, Lombok is still under the radar for most investors, but is attractive for first-movers looking to get a foothold in a relatively untapped location with a seemingly massive potential.
From the eyes of an investor, Indonesia has the 20th largest purchasing parity in the world, with one of the biggest human resource pools available. The local economy is going from strength to strength, as it is seeing stable inflation from visitors driving consumer spending in the region.
Renewable resources (agricultural products) and nonrenewable resources (minerals) are abundant in Indonesia, and conveniently, they occupy a strategic location along major sea-lanes between East and West Asia, which has a direct connection to the world’s largest market with the Malacca Strait – the most active sea lane in the world and a major global shipping route.
Moreover, already underway in Lombok is the Mandalika Project, a $3 billion USD eco-tourism destination located in the Central Lombok Regency, or West Nusa Tenggara Province. The Mandalika project is currently under construction on a 1,175-hectare plot of land with 12,000 hotel rooms, a 350,000-square-meter commercial space, a 78-berth marina, and a 120ha theme-park planned. The area is to also feature a street circuit complex to host the MotoGP in 2021.
Lombok also has the added bonus of providing a ‘classier’ touch on a popular tourist destination that other surroundings areas may not boast. It’s tucked away from the hustle and bustle of Bali and steers away from the ‘party island’ sort of vibe. Not only is this in the best interest of investors, but the local Lombok population is incredibly receptive to facilitating this investment, especially when it protects the sanctity of their peaceful and beautiful environment.
If the array of feathers in Lombok’s hat hasn’t convinced investors yet, then perhaps this will: there’s no need to buy actually property in Lombok, in order to gain exposure to this potentially hugely exciting property development opportunity.
It will soon be possible to buy shares in a property group, Lombok Property Group (LPG), an end to end property developer located in the heart of Lombok tourism, Kuta Mandalika. LPG owns the licence of Ray White Indonesia and manages land and property sales and brokerage, construction, architect and design interior, hotel management, and hospitality.
LPG are currently in the process of preparing an application to list on the National Stock Exchange (NSX) here in Australia. Sign up for news and updates on Lombok Property Group.
Reach Markets have been engaged by LPG to assist with private investor management. Lombok Property Group has recently launched a brand new website detailing development updates and more information for its unique SIWA Cliffs project. You can see more at https://www.siwacliffs.com/