Australia vs Bali Property Yields – Stability vs Cash Flow
- International Property Alerts
- September 30, 2025
When investors talk about property, two things usually matter most: capital growth (how much the property goes up in value over time) and rental yield (the percentage of income you earn from the property each year compared to the price you paid).
Australia and Bali both attract international investors, but the story they tell about yields could not be more different. Australia is known for stable but low rental returns, while Bali stands out as a tourism-driven market with much higher income potential.
Yields in Australia: Safe but Slim
In Australia, gross rental yields in the major cities usually sit between 3% and 4.5%. In practice, that means if you buy a $1 million apartment in Sydney, you might only collect around $30,000–$40,000 in rent a year.
Why so low?
1. High property prices compared to rents.
Over the past decade, Australian property values have soared, especially in Sydney and Melbourne. Rents have risen too, but not nearly enough to match purchase prices. That gap squeezes yields.
2. Policy and regulation.
While Australia has a strong rental market, rules around short-stay rentals like Airbnb are getting stricter. For example, Victoria is introducing a 7.5% levy on short-stay bookings, and parts of New South Wales cap short-stay rentals at 180 days per year. These rules limit the upside for investors chasing higher returns.
3. Costs and taxes.
Land tax, property management fees, and maintenance all eat into what’s already a modest yield. By the time you calculate your net return, many properties in Sydney or Melbourne bring in closer to 2%–3% net.
In short: Australia is a capital-growth play. Investors often buy for long-term appreciation in value rather than immediate cash flow.
Yields in Bali: Tourism Drives Returns
Bali is a completely different story. Here, investors aren’t renting long-term to locals. Instead, they tap into tourism, one of the strongest in Southeast Asia. Villas and apartments are often listed on Airbnb, Booking.com, or managed directly like boutique hotels.
Typical gross yields in Bali fall between 8% and 12%, and in the right locations, even higher.
Why so high?
1. Lower purchase prices.
A luxury villa in Bali might cost a fraction of what a modest apartment in Sydney would. Because the entry price is lower, every dollar of rent stretches further.
2. Strong nightly rates.
Popular areas like Canggu, Seminyak, and Uluwatu command hotel-style rates. A well-designed villa can earn $150–$300 per night, with healthy occupancy across the year.
3. Tourism demand.
Bali continues to see millions of international visitors annually. Many prefer private villas over hotels, which keeps demand strong and occupancy rates high.
Even after taking out management fees (10–25%), running costs, and taxes, a well-run Bali property can often deliver 5%–9% net yield. That’s still far ahead of what’s typical in Australia.
Simple Example:
Sydney apartment ($1 million purchase price):
Rent: ~$35,000 per year (3.5% gross)
After costs: closer to 2%–2.5% net
Bali villa ($300,000 purchase price):
Income: ~$30,000–$40,000 per year (10–12% gross)
After costs and taxes: ~6%–8% net
So the Sydney investor ties up three times more money to make the same or even less income than the Bali investor.
Risks and Realities
It’s important to balance the upside with the risks.
In Australia: You get legal security, a transparent system, and long-term value growth, but cash flow is thin.
In Bali: You get strong cash flow, but the market is tied to tourism. A drop in flights, global events, or local regulation can hit occupancy hard. Ownership structures for foreigners also require careful legal planning (leasehold, PT PMA companies, etc.).
The Bottom Line
If your goal is steady income and high yields, Bali offers opportunities that Australia simply can’t match.
If your goal is stability and long-term appreciation, Australia still has a strong case.
Many investors actually choose to balance both—holding an Australian property for long-term growth while adding a Bali villa for cash flow. That way, they enjoy the best of both worlds.
📧 elly@internationalpropertyalerts.com
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