Once overshadowed by its famous neighbour Bali, Lombok is now emerging as a major hotspot in Southeast Asia’s luxury property market. With its pristine beaches, government-backed infrastructure projects, and growing appeal among eco-conscious travellers, the island is witnessing a sharp rise in real estate interest—particularly in luxury villas.

This shift has not gone unnoticed. International investors are moving quickly to secure property on the island, lured by affordable land prices, high rental yields, and first-mover advantages. But what exactly is driving this boom—and is now really the time to invest?

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Strategic Growth Backed by Infrastructure

Lombok’s transformation began in earnest following the launch of the Mandalika Special Economic Zone (SEZ) in 2017. Backed by a USD 3 billion investment, this government-supported initiative aims to create a sustainable tourism hub along the island’s southern coastline.

Several major infrastructure improvements have fuelled investor confidence:

• Lombok International Airport has been expanded and now offers direct flights to and from Singapore and Australia.
  
  
• A newly completed bypass road has reduced travel time from the airport to key coastal towns like Kuta Mandalika to under 30 minutes.
  
  
• The Mandalika International Street Circuit, host of the MotoGP since 2021, has drawn international attention and tourism to the region.
  
  

According to Maju Properties, tourism arrivals exceeded 1 million in 2023, and land values in areas like Selong Belanak and Kuta have reportedly doubled over the past two years.

Why Investors Are Choosing Lombok Over Bali

Lombok offers several compelling advantages over more saturated markets like Bali:

1. Lower Land Prices

Land in key areas of South Lombok is still significantly more affordable than in Bali—up to 70% cheaper in some cases. This allows investors to enter the market with less capital while enjoying greater appreciation potential.

2. Attractive Rental Yields

Luxury villas on Lombok’s southern coast can command nightly rates of USD 200–300 with average occupancy rates of 65–80%. This translates into annual yields of 10–20%, depending on the property’s location, design, and management setup (Selaras Lombok).

3. Government Incentives

As part of the SEZ, investors benefit from streamlined licensing, tax incentives, and improved infrastructure—all designed to accelerate sustainable tourism and encourage foreign capital inflows.

4. Untapped Tourism Potential

Unlike Bali, Lombok remains relatively underdeveloped, with less congestion, cleaner beaches, and stronger ties to local culture. This “unspoilt” appeal is resonating with digital nomads, remote workers, and travellers seeking more authentic, eco-conscious experiences.

Where Are the Best Places to Buy?

Three regions in South Lombok stand out as prime locations for villa investment:

🌴 Kuta Mandalika

The heart of the Mandalika SEZ, Kuta is buzzing with development—from beachfront resorts and beach clubs to the newly constructed MotoGP track. It’s ideal for investors seeking high footfall and international exposure.

🌊 Selong Belanak

Famed for its white-sand bay and rolling green hills, Selong Belanak has become a centre for eco-luxury villa development. The area attracts long-stay guests and families looking for a quieter alternative to Bali.

🏄‍♂️ Gerupuk & Tanjung Aan

These picturesque surf towns are popular with lifestyle investors and boutique developers. The charm lies in their laid-back feel, surf-friendly beaches, and proximity to Kuta.

What Kind of Returns Can You Expect?

A well-located and managed villa in South Lombok can offer returns above market averages.

Case Study Example:

• Purchase Price: USD 250,000
  
  
• Nightly Rate: USD 250
  
  
• Occupancy Rate: 70%
  
  
• Gross Annual Income: USD 63,875
  
  
• Estimated Net ROI: 12–15%
  
  

Over time, the combination of rising land values and steady tourism growth positions Lombok as both a short- and long-term investment opportunity.

Legal Pathways for Foreign Investors

Foreigners are not permitted to own freehold land in Indonesia, but there are several legal alternatives that allow for safe and secure investment:

✅ PT PMA (Foreign-Owned Company)

The most robust option, this structure allows foreigners to own land under a Hak Guna Bangunan (HGB) title. Suitable for villas operated as rental businesses.

✅ Hak Pakai (Right to Use)

Allows foreigners to lease land for up to 80 years for residential purposes. This structure is recognised by Indonesian law and offers strong protections.

✅ Leasehold Agreements

A common route for villa ownership, leases typically range from 25 to 30 years with options to renew. Always ensure contracts are reviewed by a local notary.

Legal support is essential when purchasing in Indonesia, and investors should work with reputable developers and licensed notaries to avoid land title issues or zoning conflicts.

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Eco-Luxury on the Rise

One of Lombok’s strongest market differentiators is its focus on eco-luxury development. Travellers are increasingly prioritising sustainability, and developers are responding with architecture that blends modern comfort with environmental responsibility.

Notable examples include:

• Mandala Eco-Resort, a low-impact, design-led resort in Montong Ajan that preserves the natural topography, prioritises farm-to-table dining, and blends contemporary architecture with sustainable living principles (mandala-ecoresort.com).
  
  
• Pullman Lombok Merujani Mandalika, which integrates solar power, rainwater harvesting and composting as part of its hotel operations (Luxury Lifestyle Awards).
  
  
• Villa Serena, a net-zero villa designed to produce its own energy and recycle all waste on-site (Bambook Studio).
  
  

Investors who align with sustainability trends are more likely to command premium nightly rates and year-round occupancy.

Risks to Be Aware Of

While Lombok presents a compelling case, investors should approach with due diligence. Common risks include:

• Unclear land titles or poorly defined ownership agreements
  
  
• Inconsistent infrastructure in undeveloped areas
  
  
• Limited availability of experienced property managers
  
  

How to mitigate risk:

• Work only with trusted developers with a proven track record
  
  
• Verify land titles with an experienced notary
  
  
• Choose locations with existing access to roads, water and electricity
  
  
• Partner with a local property management firm if operating a rental villa
  
  

Conclusion: A Unique Window of Opportunity

Lombok is not just “the next Bali”—it is a distinct and promising destination in its own right. With government support, eco-conscious tourism appeal, and high-yield real estate options, the island offers investors a unique chance to get in early before the market becomes saturated.

As the global appetite for sustainable luxury and remote island living continues to grow, Lombok is poised to become one of Southeast Asia’s most valuable property markets.

📣 Ready to Invest?

Looking to explore villa investment opportunities in Lombok? Connect with local experts, schedule a site visit, or download our comprehensive Investor’s Guide to Lombok Villas to learn more.

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