By Oliviia Rumi
In the glittering world of international real estate, Dubai and Bali stand out as two of the most alluring destinations for investors. Both offer warm climates, rich cultures, and booming tourism-driven economies. Yet, beneath the tropical sunsets and glossy brochures lies a crucial distinction that defines the long-term prospects for any savvy investor: ownership structure.
At a recent real estate forum, this fundamental difference sparked a candid discussion. A Dubai-based developer posed a sharp question to the Bali contingent: “How can long-term leasehold in Bali compete with full ownership in Dubai?”
It’s a fair question—and one that touches the heart of the matter.
1. Leasehold vs. Freehold: The Core Distinction
Dubai offers full freehold ownership for foreigners in designated zones. This means buyers get complete and perpetual control over their property—a Western investor’s ideal. Bali, on the other hand, operates on an entirely different legal basis. Foreigners can only access property via leasehold agreements, typically structured over 25 to 30 years, with potential for renewal.
Critics often see this as a disadvantage. But the reality is more nuanced. Southeast Asia has long functioned under leasehold systems, especially in countries with protective land laws. Bali’s legal environment is stable, and many leasehold properties now offer up to 90-year terms when renewals are accounted for, making them highly viable for investment.
Moreover, Bali consistently ranks among the highest-yielding rental markets globally, thanks to its year-round tourism and limited high-end supply.
2. The Mirage of Freehold in Dubai: A Secondary Market Problem
Interestingly, the very strength of Dubai’s full ownership model has become a double-edged sword. With hundreds of thousands of new units entering the market annually, secondary properties—those built 20 or 30 years ago—are facing obsolescence. Investors report that these older units are increasingly difficult to sell or rent. They’re simply outdated, both physically and in buyer preference.
So, while you may “own forever,” what exactly are you holding? A declining asset in an oversupplied market may not be the safe haven it seems.
In contrast, Bali’s leasehold properties, though limited in time, tend to remain highly desirable due to restricted land availability, a more curated development pace, and continued demand from digital nomads and long-stay tourists.
3. The Risk Factor: Transparency and Due Diligence
Of course, no emerging market is without its risks. Bali’s property sector still lacks fully developed escrow systems and mandatory insurance protections seen in more mature markets. But this is typical of an early-cycle investment environment, where higher returns are compensation for calculated risk.
That said, investors are not helpless. Savvy buyers in Bali now work closely with legal advisors to:
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Scrutinize developer credentials and legal documentation
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Examine completed past projects to assess quality and sustainability
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Analyze real-world rental performance via Airbnb and Booking.com ratings, not just glossy brochures
With the right due diligence, these risks become manageable—and potentially very rewarding.
Conclusion: It’s About Strategy, Not Just Ownership
So, what’s the better deal—permanent ownership in a saturated market, or long-term leasehold in a high-yield, high-demand destination?
The answer depends on your goals.
If you seek legal certainty and capital preservation, Dubai may appeal. But if cash flow, tourism-driven yield, and lifestyle appeal are your focus, Bali’s leasehold model—despite its legal quirks—may very well outperform.
Ultimately, the form of ownership is not just a legal detail. It shapes the entire character of your investment. And understanding that difference is where smart money starts.