“Australian Property Investors are ‘Copping It’” - Geonet Property & Finance Group (GPFG)

As the Australian property market grows more challenging for investors, many are turning to cash-flow positive property investments overseas, with Bali emerging as a top choice. With rising financial pressures, restrictive legislation, and declining rental yields, Bali offers Australians an attractive alternative for creating wealth and generating consistent passive income.

Let’s explore why Bali is becoming a go-to destination for property investors and how current Australian market conditions are influencing this shift.

The Rising Tide of Investor Discontent in Australia

Australia's property investors are facing mounting challenges. Recent statistics paint a grim picture of a market struggling under increased costs, higher interest rates, and restrictive policies.

1. More Investors Are Selling Their Properties

A survey by the Property Investment Professionals of Australia (PIPA) in 2023 revealed:

• 19.2% of investors were considering selling their properties, up from previous years.

• 12% of investors actually sold their properties that year.

• Even more concerning, 38% of investors indicated they are considering selling in 2024.

This growing exodus is reshaping the Australian property market, with many investors deciding the financial burdens outweigh the benefits.

2. A Decline in Rental Properties

The departure of investors has created a ripple effect in the rental market. According to CoreLogic, investor-owned properties accounted for 32.7% of all residential listings in 2023, a 7% increase above the decade average.

Source: PIPA Annual Investor Sentiment Survey 2023

Properties previously owned by investors are being purchased primarily by:

• Existing homeowners (43.1%)

• First-home buyers (30.3%)

As these properties are removed from the rental pool, Australia’s rental stock has shrunk significantly, contributing to the ongoing rental crisis. Census data from 2021 shows there were 2.478 million rental dwellings in Australia; by 2023, nearly 220,000 rental properties had been sold, predominantly to non-investors.

3. Diminishing Rental Yields

While demand for rental properties remains high, rental yields have stagnated. Rising property prices, interest rates, and costs have created a gap between returns and expenses.

Key stats on rental yields in Australia:

• Annual rent increases exceeded 10% in 2022 and 2023, yet yields hovered at around 4% nationwide.

• A staggering 57.6% of investors reported their portfolios were negatively geared in 2023, up from 30% in 2022.

4. Rising Mortgage Interest Rates

The Australian Bureau of Statistics (ABS) reported a 91.6% increase in annual mortgage interest payments as of June 2023. Investors who purchased properties during periods of low interest rates are now grappling with significantly higher repayments.

For example:

• In September 2020, the difference between weekly rent and mortgage repayments was +$12.

• By May 2023, that figure had plummeted to -A$247 per week.

"If an investment costs more than it earns, many investors are asking themselves, ‘Is it really worth it?’" says Chad Egan, CEO of GPFG.

Why Australians Are Investing in Bali Real Estate

As Australian property investors face dwindling returns and increasing financial pressures, many are shifting their focus to overseas property markets, particularly Bali. Known for its booming tourism industry, affordable price points, and lucrative returns, Bali offers a compelling alternative for investors looking to diversify their portfolios.

Key Benefits of Investing in Bali:

1. Cash-Flow Positive Returns
   Bali’s strong tourism sector ensures high rental occupancy rates, creating reliable passive income streams.

2. Affordable Entry Points
   Compared to Australia, Bali’s property prices are significantly lower, making it easier for investors to enter the market.

3. Tax Benefits
   Investors can enjoy similar tax benefits in Bali, including depreciation deductions. GPFG also partners with developers who offer interest during construction, meaning investors can start earning cash flow almost immediately.

4. Steady Tourism Growth
   With surging tourist arrivals, Bali properties experience consistent rental demand. Whether it’s luxury villas or branded resort units, investors benefit from both short-term holiday stays and long-term leases.

"Returns are higher, price points are lower, and the costs of ownership are significantly less than in Australia," says Egan.

The Shift from Australian to Overseas Investments

Many Australian investors are cashing out of the local property market, citing high costs, inflation, and legislative pressures. Some are selling to capitalise on their properties' capital growth, while others are simply tired of bearing more costs than benefits.

"What we’re seeing is a growing trend of investors turning to overseas markets, like Bali, where the opportunities for positive returns are undeniable," explains Egan.

Looking Ahead to 2025

The Australian property market is at a crossroads. Financial pressures, stagnant yields, and a shrinking rental market are driving investors to rethink their strategies. Bali is positioning itself as a top choice for those seeking higher returns, lower costs, and cash-flow-positive investments.

"It’s a tough time to be a property investor in Australia, but opportunities exist for those willing to look abroad," says Egan. "At GPFG, we’re here to guide investors towards smarter, more profitable solutions, including Bali real estate and fractional property ownership."

Bali is quickly emerging as a hotspot for Australian property investors looking for better returns and lower financial burdens. Its thriving tourism sector, affordable properties, and steady rental demand make it an attractive option for cash-flow-positive investments.

Discover money management investment secrets and more information on the ins and outs of Bali property investment by accessing our educational video content.

Head to our main website to get started: balipropertyinvestment.com.au