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Bali · Indonesia

Bali property investment
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Luxury villas and hotel resort investments in Bali — tailored for Australians seeking lifestyle, income and long-term growth.

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Wyndham Global· SONO Hotels· ELLE brand· Forbes featured
↓
Featured · Bali

ELLE Resort & Beach Club

A five-star beachfront resort in Seminyak — branded, managed and backed by SONO Hotels & Resorts.

$75,450
4.7%Australian residential yield average vs 8–15%Bali resort investment returns
Why Bali

The perfect storm
for property investment

Forbes Magazine

“Bali is the perfect storm for property investment”

Trading Economics

Foreign tourists to Indonesia surged to 1.16 million in April 2025

BPS Statistics Indonesia

6.95 million Bali visitor arrivals in 2025 — up 9.72% year on year

For Australian investors

Bali vs Australia

A side-by-side look at how a Bali resort investment compares with buying an investment property at home.

Australia Bali
Typical entry price
Australia
~$900,000 national median
Bali
$75,450
Gross rental yield
Australia
~4.7% national average
Bali
8–15% achievable
Ongoing owner costs
Australia
Council rates, strata, land tax, insurance
Bali
Hotel-managed — no strata, no council rates
Average capital growth
Australia
Varies by city, recently 8–10%/yr
Bali
~7% per year

Australian figures are national averages as at early 2026 and vary materially by city and property type. Bali figures are indicative and depend on project, location and management. This is general information only — not financial advice. Speak with an independent financial adviser before making investment decisions.

The projects

A closer look at the developments shaping our Bali portfolio.

Free investor kit

Everything you need to evaluate a Bali investment

  • Floor plans and suite configurations
  • Independent yield and return projections
  • Legal structure overview for Australian buyers
  • Comparable market data — Bali vs domestic

Straight to your inbox. No spam, ever.

How it works

Your pathway to
Bali property ownership

From your first conversation with our Bali specialists through to settlement and beyond — here is how the process works for Australian investors.

01
Discovery call
A 30-minute session with our Bali specialist to understand your investment goals, budget and timeline. No obligation.
02
Investor kit sent
You receive a comprehensive pack — floor plans, yield projections, legal structure overview and comparable market data.
03
Independent advice
We refer you to independent legal and financial advisors who specialise in Australian-Balinese property transactions.
04
Secure and settle
35% deposit, progressive construction payments tied to verified milestones with independent project manager updates.
Common questions

Bali property investment FAQs

Foreign nationals cannot hold freehold land title in Indonesia, but can secure long-term leasehold rights (commonly 25–50 years, depending on the project) or invest through a licensed company structure for larger developments. Both ELLE and Ramada are structured for Australian investors, with the lease terms and entity details set out in each project's investor kit.

Gross rental yields of 8–15% are achievable for well-located, professionally managed resort investments in Bali, though actual returns depend on occupancy, seasonality and the operator's management quality. Both featured projects are professionally managed by international hotel operators, which removes the day-to-day burden from the investor.

Leasehold is the standard, well-established route for foreign investors in Indonesia and shouldn't be seen as a lesser form of ownership — it's simply a different structure. Combined with a hotel-managed model, it removes the strata, council rate and day-to-day maintenance burden that comes with Australian freehold investment property, while still delivering rental income and capital growth over the lease term.

It starts with a no-obligation discovery call to understand your goals and budget, followed by a full investor kit covering floor plans, yield projections and the legal structure. We then refer you to independent legal and financial advisors before any commitment, and settlement is staged against verified construction milestones with independent project manager updates throughout.

Most resort-managed investments allow owners a set number of personal-use nights per year outside peak rental periods, so you can enjoy the property as a holiday home while it earns income the rest of the year. Exact personal-use allowances vary by project and are detailed in each investor kit.

Talk to a specialist

Luxury is personal.
So are we.

Our Bali investment specialists are available for a no-obligation 30-minute call. We'll walk you through the projects that fit your budget, timeline and goals — and answer every question before you commit to anything.

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News & insights

Latest from the Bali market

Bali investment
Bali insights
2 June 2026 · 5 min read

Why Bali keeps coming up in Australian investor conversations

30% of Australians considering overseas property. The Asia preference explained.

Read article ›
ELLE Resort Bali
Project feature
Project feature · 2026

Inside ELLE Resort & Beach Club: Bali's next iconic destination

168 suites. SONO Hotels. Multiple income streams. Entry at $75,450 AUD.

View project ›
Licensed selling entity: Property Source Bali Pty Ltd trading as Stone Projects Bali
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stonenewprojects.com.au/news

News & insights

Market intelligence, investment perspectives and policy updates — across Australian new projects and Bali hospitality investment.

All articles
2026 budget property investors
Policy & tax

The budget has landed. Here's what it means for Australian property investors.

Negative gearing restricted from July 2027. CGT discount replaced. We break down the changes and where capital is moving.

9 June 2026 · 7 min Read ›
Bali investment 2026
Bali insights

Why Bali keeps coming up in Australian investor conversations

30% of Australians are now considering buying property overseas. We look at what's driving the Asia preference and why hospitality assets are part of the discussion.

2 June 2026 · 5 min Read ›
How Bali property investment works
Investor guide

How Bali property investment works for Australians

Ownership structures, legal frameworks, payment stages and what to ask before you commit. A plain-English guide for first-time Bali investors.

Stone New Projects · 8 min Read ›
North Bali international airport
Market update

North Bali International Airport: what it means for property values

Indonesia's Presidential Regulation No. 12/2025 confirmed the airport as a national strategic project. We look at the investment case for North Bali.

Stone New Projects · 6 min Read ›
Property yield comparison
Market update

Australian yields vs Bali hospitality returns: a direct comparison

3.7% gross vs 8–15% projected. We put the numbers side by side — including costs, tax treatment and income reliability — so you can judge for yourself.

Stone New Projects · 6 min Read ›
ELLE Resort Beach Club Bali
Project feature

ELLE Resort & Beach Club: inside Bali's next iconic destination

168 suites, a signature beach club, SONO Hotels & Resorts as operator, entry at $75,450 AUD. A full look at the project and investment structure.

Project feature · 2026 View project ›
10 Year Latent Defect Insurance
Investor guide · Australia

What is 10 year latent defect insurance — and why does it matter when buying off the plan?

Not all new developments offer it. Here's what LDI covers, why it protects your investment, and what to look for before you sign.

Stone New Projects · 5 min Read ›
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2026 federal budget Australian property investors
Policy & tax

The budget has landed. Here's what it means for Australian property investors.

9 June 2026 · 7 min read · Stone New Projects

The Australian property investment playbook has been simple for decades: buy locally, hold long-term, collect the growth. That playbook is being rewritten.

New research from Money.com.au shows 30% of Australians are now actively considering buying property overseas. Of those, 14% want to invest abroad while continuing to live in Australia — not emigrating, simply allocating capital more strategically.

What changed in the 2026 federal budget

What had been speculation is now law. The May 2026 Federal Budget confirmed two major structural shifts for property investors.

Negative gearing on established residential properties purchased after 7.30pm AEST on 12 May 2026 will be restricted from 1 July 2027. Losses will only be deductible against rental income or capital gains from rental properties — not against salary or other personal income. Existing owners and those already under contract before the announcement retain access to negative gearing under the current rules. Eligible new builds remain exempt, with investors in those properties retaining access to both negative gearing and existing CGT concessions.

The 50% capital gains tax discount is also being replaced from 1 July 2027 with cost base indexation and a 30% minimum tax on net capital gains — applying across all CGT assets, not just residential property.

Key dates to understand: Properties purchased before 7.30pm AEST 12 May 2026 are fully grandfathered. New builds remain exempt from both changes. All other established residential properties purchased from that point face the new rules from 1 July 2027.

The numbers were already a problem

The budget didn't create the pressure — it accelerated it. Sydney's median house price sits at $1.557 million. Brisbane has crossed $1 million. Nationally, prices rose close to 10% last year and remain well above pre-Covid levels.

The income side has never kept pace. Gross residential yields nationally sit around 3.7–3.8%. Once land tax, management fees, insurance, maintenance, and vacancy are factored in, the net return for many landlords is negligible. For years, capital growth covered that gap. That model now has fewer tax advantages behind it.

Where serious investors are looking

The Money.com.au research shows clear geographic intent forming. NSW leads the trend at 32% considering overseas property, followed closely by Victoria at 31%. Asia is the dominant region of interest — 41% of Victorians and 39% of Western Australians nominated it as their preferred destination.

Southeast Asia — and Bali in particular — sits squarely within that region of interest. It's geographically close, culturally familiar to Australians, and backed by genuine tourism demand and growing professional investment infrastructure.

Why Bali hospitality investment is a different conversation

The investors we work with aren't looking for a holiday house. They're looking for assets that generate real income — returns that show up in their account, not just on paper at the end of a capital growth cycle.

Professionally managed hospitality assets in Bali generate revenue across multiple streams: accommodation, food and beverage, wellness, events, and broader tourism activity. That's a fundamentally different structure to a residential tenancy yielding 3.7% gross before costs, with diminishing tax concessions behind it.

  • Gross yields of 8–15% in Bali hospitality vs 3.7–3.8% nationally for Australian residential
  • No negative gearing restrictions on international assets
  • Multiple income streams: hotel + beach club + F&B + wellness
  • Fully managed — no landlord responsibilities
  • Entry at $75,450 AUD via fractional ownership structures

The direction is clear

Australians aren't abandoning property as an asset class. They're becoming more deliberate about where their capital goes — and they're making those decisions in a market that has changed materially.

The budget confirmed what many investors had been preparing for. The question now is where the opportunity sits.

For a growing number of investors, the answer is pointing east.

Thinking about Bali investment? Our international property specialists work exclusively with Australian investors considering Bali and Southeast Asia. Book a no-obligation discovery call below or download the ELLE Resort & Beach Club project overview to start the conversation.
Related articles
Bali insights
Why Bali keeps coming up in Australian investor conversations
30% of Australians considering overseas property. We look at what's driving the Asia preference and why hospitality assets are part of the discussion.
Project feature
ELLE Resort & Beach Club: inside Bali's next iconic destination
168 suites, a signature beach club, and SONO Hotels & Resorts as operator. A full look at the project and investment structure at $75,450 AUD.
‹ News & insights
Bali investment 2026
Bali insights

Why Bali keeps coming up in Australian investor conversations

2 June 2026 · 5 min read · Stone New Projects

Two years ago, Bali investment was a niche conversation. Today it comes up in almost every serious discussion we have with Australian investors about what to do next. The question has shifted from "would you consider overseas property?" to "what's available in Bali, and how does it work?"

New research from Money.com.au explains why. Thirty percent of Australians are now actively considering buying property overseas. Of those, 14% want to invest abroad while continuing to live in Australia — not emigrating, simply allocating capital more strategically. Asia is the dominant region of interest, with 41% of Victorians and 39% of Western Australians nominating it as their top choice.

Bali sits directly in that zone of interest. But proximity and familiarity aren't the whole story.

The domestic backdrop is doing a lot of the convincing

Sydney's median house price now sits at $1.557 million. Brisbane has crossed $1 million. Nationally, dwelling prices rose close to 10% in the past year and remain well above pre-Covid levels. For investors, gross residential yields nationally sit around 3.7 to 3.8%. Once land tax, management fees, insurance, maintenance, and vacancy periods are factored in, net returns for many landlords become negligible.

The model has worked because capital growth covered that gap. But with the 2026 Federal Budget now restricting negative gearing on established residential properties from 1 July 2027, and replacing the 50% CGT discount with a 30% minimum tax on net gains, the equation is shifting structurally — not just cyclically.

For investors comparing what their capital does in Sydney versus what it might do in Bali, the numbers are becoming harder to ignore.

What Bali offers that the domestic market doesn't

The investors we work with aren't looking for a lifestyle purchase. They're looking for assets that generate real income — returns that appear in their account rather than waiting to materialise through a future sale.

Professionally managed hospitality assets in Bali operate on a different income model entirely. Revenue flows from accommodation, food and beverage, wellness, events, and broader tourism activity. Gross yields of 8 to 15% are achievable in premium locations. That's not a marketing promise — it's a product of high occupancy, multiple revenue streams, and an operator incentivised to perform.

  • Gross yields of 8–15% for well-located hospitality assets
  • Multiple income streams: accommodation, F&B, wellness, events
  • Indonesia GDP growth at 5.03% — stable, growing consumer economy
  • 6.9 million international arrivals in Bali in 2025, up 9.72% year-on-year
  • North Bali International Airport confirmed as a national strategic project under Presidential Regulation No. 12/2025
  • Entry accessible at $75,450 AUD via fractional ownership structures

The infrastructure story is underappreciated

Most Australian investors are aware of Bali's tourism appeal. Fewer are across the infrastructure investment that is reshaping the island's long-term growth trajectory. The North Bali International Airport — confirmed as a national strategic project by Presidential Decree in 2025 — is set to unlock an entirely new region for international tourism and property development. The implications for capital growth in established tourism corridors like Seminyak and Uluwatu are material.

Indonesia's projected annual GDP growth of approximately 5% through 2029, combined with a maturing legal and ownership framework for foreign investors, creates a fundamentally different risk profile to what existed five years ago.

Familiarity is reducing the barrier to action

Something has changed in the conversations we're having. A year ago, Bali investment required more explanation. Today, many investors already know someone who has done it, or have researched the ownership structures themselves. That familiarity is compressing the distance between interest and intent.

The legal structures — leasehold via an Indonesian PT PMA company, or nominee structures — are increasingly well understood by accountants and financial advisers who specialise in this space. The process for Australian buyers is more streamlined than most assume. The main questions we field now are about specific projects, operators, and return structures — not about whether it's possible.

The core appeal, plainly stated: A professionally managed Bali hospitality investment generates income from day one, requires no active management from the investor, has genuine diversification value relative to Australian residential property, and offers entry points that a large proportion of Australian investors can access without liquidating existing positions.

What to look for in a Bali investment

Not all Bali investments are equal, and the quality of the operator is the most important variable. A resort in the right location, managed by an experienced hospitality group with genuine global distribution, performs very differently to a villa managed through a local rental management company.

When evaluating a project, the questions that matter are: Who is the operator and what is their track record? How is revenue distributed and audited? What oversight exists for the construction period? What does the ownership structure look like on paper, and has independent Indonesian legal advice been obtained?

We work with a small number of projects where we're comfortable enough with the answers to those questions to present them to our clients. That selectivity is deliberate.

Related articles
Policy & tax
The budget has landed. Here's what it means for Australian property investors.
Negative gearing restricted from July 2027. CGT discount replaced. The rules have changed — we explain what it means in practice.
Project feature
ELLE Resort & Beach Club: inside Bali's next iconic destination
168 suites, a signature beach club, and SONO Hotels & Resorts as operator. A full look at the project and investment structure at $75,450 AUD.
‹ News & insights
How Bali property investment works
Investor guide

How Bali property investment works for Australians

Stone New Projects·8 min read

The most common thing we hear from Australian investors considering Bali is some version of the same question: "How does it actually work?" The ownership structures, legal requirements, and payment processes are different to what Australians are used to, and that unfamiliarity creates a gap between interest and action.

This guide is designed to close that gap. It covers the ownership structures available to foreign investors, the steps involved in purchasing, how income is generated and distributed, and what questions you should be asking before you commit to anything.

Can Australians legally own property in Bali?

Foreigners cannot hold freehold title (Hak Milik) over land in Indonesia — that form of ownership is reserved for Indonesian citizens. However, there are two established legal structures that allow foreign investors meaningful and secure property rights.

  • Leasehold (Hak Sewa): A long-term lease agreement between the investor and the landowner, typically for 25 to 30 years with an option to extend for a further 20 to 25 years. Leasehold is the most common structure for individual villa purchases. The investor does not own the land, but has contractual rights over it for the lease term.
  • PT PMA (Hak Pakai via foreign-owned company): An Australian investor establishes or acquires shares in an Indonesian foreign investment company (PT PMA), which holds the property under a Hak Pakai (right to use) or Hak Guna Bangunan (right to build) title. This is the preferred structure for larger investments and commercial property, including hotel and resort assets.

For hospitality investment projects like ELLE Resort & Beach Club, the structure is typically a form of fractional ownership within a legally constituted Indonesian entity, with the terms of ownership, income distribution, and exit rights all defined in the investment agreement. Independent Indonesian legal advice is strongly recommended before signing anything.

How does the purchase process work?

For a managed resort investment, the process is more structured and more straightforward than buying a standalone villa. The typical steps are as follows.

  • Expression of interest and reservation of a specific suite or fractional unit
  • Receipt of full investment information pack — financial projections, legal structure, operator details, development timeline
  • Independent legal and financial advice (your own adviser, not the developer's)
  • Execution of investment agreement and payment of initial deposit (typically 10 to 35% depending on project)
  • Progressive construction payments tied to verified milestone completion
  • Final settlement and transfer of ownership documentation
  • Handover to the operator — income distributions commence from opening

Progress payments should only be released against independent verification of construction milestones. Stone New Projects engages an independent project manager for all international investment projects we present to clients — this is a non-negotiable part of our process.

How is income generated and distributed?

For a managed hospitality asset, revenue comes from multiple streams: nightly accommodation, food and beverage, wellness services, events, and ancillary guest spending. The operator pools this revenue and distributes investor returns either as a guaranteed percentage during the construction period, or as a profit share arrangement once the property is operational.

At ELLE Resort & Beach Club, investors receive an 8% per annum guaranteed return during the construction period, followed by a share of operational revenue once the resort opens. Income is distributed regularly and reported transparently.

What about currency and taxes?

Income from an Indonesian investment property is denominated in Indonesian Rupiah (IDR) and converted to AUD for distribution. Currency fluctuation is a real consideration, and investors should factor this into their return expectations.

From an Australian tax perspective, income from overseas property is assessable in Australia and must be declared on your tax return. Capital gains on the disposal of foreign property are also subject to Australian CGT rules. We strongly recommend obtaining specific tax advice from an accountant who specialises in Australian investors with offshore assets — this is not a general accounting question.

What questions should you ask before committing?

  • Who is the operator and what properties do they currently manage?
  • What is the ownership structure on paper, and has it been reviewed by an independent Indonesian lawyer?
  • How are construction milestones defined and independently verified?
  • What is the income distribution mechanism and how often are payments made?
  • What are the exit provisions — can you sell your interest and to whom?
  • What happens to the investment if the developer faces financial difficulty?
  • What is the projected occupancy basis for the yield figures presented?
Our position: We only present projects where we can answer all of these questions directly, and where independent legal and financial due diligence is available to investors. If a project can't answer these questions clearly, we don't present it.
Related articles
Bali insights
Why Bali keeps coming up in Australian investor conversations
30% of Australians considering overseas property. We look at what's driving the Asia preference.
Policy & tax
The budget has landed. Here's what it means for Australian property investors.
Negative gearing restricted. CGT discount replaced. Where is capital moving now?
‹ News & insights
North Bali international airport
Market update

North Bali International Airport: what it means for property values

Stone New Projects·6 min read

In early 2025, the Indonesian government formally confirmed the North Bali International Airport as a National Strategic Project under Presidential Regulation No. 12/2025. For investors already in the Bali property market, this was expected. For those still considering whether to act, it changes the calculus meaningfully.

Understanding why requires a brief look at how Bali's tourism geography currently works — and how the airport disrupts it.

The current bottleneck

Virtually all of Bali's international tourism traffic currently arrives through Ngurah Rai International Airport in Denpasar, located in the south of the island. This creates a geographic concentration effect: the majority of tourism infrastructure, hospitality investment, and visitor spending is clustered in the southern corridor — Seminyak, Canggu, Uluwatu, Nusa Dua, Sanur.

North Bali, by contrast, is dramatically underserved relative to its natural appeal. The region encompasses Lovina, the volcanic highlands, Menjangan Island, and extensive undeveloped coastline. It has been effectively inaccessible to mass international tourism because getting there from Denpasar involves a two-to-three hour drive through mountain terrain.

The North Bali International Airport changes that equation entirely.

What the airport project involves

The proposed airport — located in the Buleleng regency on Bali's north coast — will be capable of handling international wide-body aircraft. The project is classified as a National Strategic Project under the Presidential Regulation, which means it has the full backing of the central government and access to accelerated regulatory approvals and infrastructure funding.

Construction timelines for infrastructure projects in Indonesia have historically been subject to revision, and investors should apply appropriate scepticism to any specific opening date. What matters from an investment thesis perspective is not the exact date, but the confirmation of government intent and the regulatory classification — both of which are now established facts.

What this means for property values across the island

The implications run in two directions simultaneously.

First, North Bali will see significant new demand for hospitality and residential investment as development capital begins to position ahead of the airport opening. Early-stage opportunities in that region will carry risk premiums commensurate with the development timeline, but the upside for well-positioned early investors could be substantial.

Second, and arguably more immediately relevant, the airport confirmation validates the broader Bali investment thesis for the entire island. When a government commits a major infrastructure project to national strategic status, it sends a signal about long-term intent that is meaningful to both domestic and international capital. Established tourism corridors like Seminyak benefit from this vote of confidence in the island's infrastructure future.

The infrastructure data point investors should know: Indonesia's Presidential Regulation No. 12/2025 confirmed the North Bali International Airport as a National Strategic Project. This classification unlocks central government funding, expedited approvals, and long-term commitment to project completion regardless of changes in regional administration.

How this connects to the wider economic picture

The airport announcement sits within a broader context of Indonesian economic momentum. Indonesia's GDP grew at 5.03% in 2024, driven by domestic consumption and investment activity. Bali recorded 6.9 million international arrivals in 2025 — a 9.72% year-on-year increase, and the country's Tourism Ministry has a stated target of continuing to grow that number significantly over the next five years.

The airport is not a standalone project. It is part of a coordinated effort to build out Indonesia's tourism infrastructure and reduce the concentration risk of a single gateway for the country's most valuable international tourism destination.

For investors considering Bali now

Infrastructure announcements of this scale typically have their greatest effect on property values before they are completed, not after. The time between confirmation of intent and delivery is when sophisticated investors tend to act — when the risk is partially absorbed by the policy commitment, but the price appreciation has not yet fully occurred.

We're not suggesting investors buy on infrastructure speculation alone. The fundamentals of any specific project — operator quality, ownership structure, income model, location — remain the primary criteria. But the airport announcement strengthens the macro case for Bali as a long-term investment destination in ways that are worth understanding clearly.

Related articles
Bali insights
Why Bali keeps coming up in Australian investor conversations
Proximity, familiarity, and strong returns are part of it. Here's the fuller picture.
Market update
Australian yields vs Bali hospitality returns: a direct comparison
3.7% gross vs 8–15% projected. The numbers side by side.
‹ News & insights
Property yield comparison
Market update

Australian yields vs Bali hospitality returns: a direct comparison

Stone New Projects·6 min read

Numbers only tell a complete story when they're compared on equivalent terms. The gap between Australian residential yields and Bali hospitality returns is well-documented, but the comparison often stops at the headline figures. This article goes further — examining the cost structures, tax treatment, income reliability, and capital considerations on both sides.

The headline figures

Gross residential yields nationally in Australia sit at around 3.7 to 3.8%, according to CoreLogic data for 2025. In Sydney — the country's largest investment market — the figure is lower, typically 2.8 to 3.2% for apartments and 2.2 to 2.6% for houses. In Brisbane and Melbourne, yields are marginally higher.

For professionally managed Bali hospitality assets in premium locations, gross yields of 8 to 15% are consistently quoted. For ELLE Resort & Beach Club specifically, investors receive a guaranteed 8% per annum during the construction period, with projected net operational returns of 15% (10-year average) once the resort opens.

On paper, that's an approximately three to four times difference in gross yield. But the relevant comparison is net, after costs — and that's where the picture changes more substantially.

What net looks like on the Australian side

A gross yield of 3.7% sounds modest. Net yield tells a more complicated story. For a typical Sydney apartment held as an investment property, the following costs commonly apply:

  • Property management fees: 6 to 10% of rental income
  • Land tax: varies by state and portfolio value, typically 0.5 to 2% of assessed land value annually
  • Strata levies: $2,000 to $8,000+ per year depending on building
  • Insurance: $1,000 to $3,000 per year
  • Maintenance and repairs: highly variable, typically 0.5 to 1% of property value annually
  • Vacancy: industry average of 2 to 4 weeks per year
  • Depreciation (claimable but declining benefit as buildings age)

After accounting for these costs on a median Sydney apartment at $900,000, net yield frequently falls below 2% — and in some cases, into negative territory. The model has historically been supported by negative gearing, which allowed those losses to offset other taxable income. With the 2026 Federal Budget restricting negative gearing on established residential properties from 1 July 2027, that offset mechanism is materially reduced for new purchases.

What net looks like on the Bali side

For a fully managed Bali hospitality investment, the cost structure is different. Management fees are embedded in the operator's revenue-sharing arrangement — investors do not pay separate management fees on top of their return. There is no land tax liability for Australian investors in Indonesia (though Indonesian taxes do apply and should be understood). Maintenance and operational costs are the operator's responsibility.

The investor's net return is therefore closer to the gross figure than in the Australian residential context. A 13% gross return on a Bali hospitality asset is, in most structures, closer to a 10 to 12% net return. The comparable Australian residential investment, after costs, might be achieving 1.5 to 2.5% net.

Income reliability: comparing the sources

The key risk question on yields is reliability. A Bali resort's income depends on occupancy and average daily rate. These are real variables, subject to economic conditions, tourism trends, and operator performance. The comparison to a residential tenancy, however, is not as clearcut as it might appear.

Bali's international arrivals grew 9.72% year-on-year in 2025, reaching 6.9 million visitors. Indonesia's economy grew 5.03% in 2024 with inflation at 2.12%. The tourism demand backdrop is genuine. An experienced operator with global distribution channels — such as SONO Hotels & Resorts — provides a more institutionalised form of income reliability than a single residential tenancy.

The comparison that matters: A $150,000 fractional investment in a Bali hospitality asset generating 13% gross returns yields approximately $19,500 per year before currency effects and Australian tax. The same capital in a single Sydney investment property might represent a small deposit on an asset that, net of costs and without negative gearing, generates close to zero income return — relying entirely on capital growth for its investment case.

Capital growth: the remaining variable

The strongest argument for Australian residential property has historically been capital growth. Sydney house prices have compounded at approximately 8 to 9% per annum over 30 years. That record is real.

Bali property has averaged approximately 7% annual appreciation over the past five years in premium tourism corridors. For hospitality assets, capital growth is less linear but can be substantial — particularly for assets that appreciate with the brand and operator performance attached to them. The North Bali International Airport announcement, confirmed as a national strategic project in 2025, adds a structural tailwind to the capital appreciation thesis across the island.

A fair summary

Australian residential property offers a proven capital growth record in major cities, high liquidity relative to offshore assets, and a well-understood legal and tax framework. These are genuine advantages that any fair comparison must acknowledge.

Bali hospitality investment offers materially higher income yields, a fully managed structure with no landlord responsibilities, diversification outside the Australian property cycle, and exposure to a tourism market with genuine structural growth. It also carries different risks: currency exposure, greater reliance on operator quality, a developing legal framework for foreign ownership, and lower liquidity than Australian real estate.

The question for any individual investor is which of those trade-offs fit their situation. What we can say clearly is that the income differential is real, the structural changes to Australian residential property taxation are material, and the conversation about where to allocate capital is a legitimate one to be having.

Related articles
Policy & tax
The budget has landed. Here's what it means for Australian property investors.
Negative gearing restricted. CGT discount replaced. The new rules explained.
Investor guide
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Ownership structures, legal frameworks, and what to ask before you commit.
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Stone New Projects is the specialist project marketing division of Stone Real Estate, headquartered in Crows Nest on Sydney's North Shore. We represent new project residential listings across Sydney and hospitality investment properties in Bali and Southeast Asia.

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Suite 101, 70–76 Alexander Street, Crows Nest NSW 2065
ABN 19 310 243 653 · Corporation Licence #10081576

Get in touch with the team

Whether you're buying your first home, investing in a new project, or exploring Bali hospitality investment — our specialists are here to guide you through every step.

‹ News & insights
10 Year Latent Defect Insurance
Investor guide · Australia

What is 10 year latent defect insurance — and why does it matter when buying off the plan?

Stone New Projects·5 min read

When you buy a new apartment off the plan, you're trusting that the building will be structurally sound not just at handover — but for years to come. Most buyers know about the standard builder's warranty. Fewer understand what latent defect insurance is, why it's different, and why its presence on a project is a meaningful signal about the quality of the developer behind it.

What latent defects actually are

A latent defect is a structural fault that exists at the time of construction but isn't visible or discoverable at handover. It might be a problem with the foundations, load-bearing elements, waterproofing in the building envelope, roofing, or other structural components that only becomes apparent months or years later — sometimes only when significant damage has already occurred.

These are different to patent defects, which are visible issues picked up during a standard building inspection. Latent defects are, by definition, hidden. They can be caused by poor workmanship, substandard materials, inadequate engineering, or design errors that weren't caught during construction or the final inspection process.

How standard builder's warranties work — and where they fall short

In New South Wales, builders of residential buildings are required to provide statutory warranties under the Home Building Act 1989. These cover:

  • Major defects in structural elements — 6 years from practical completion
  • Non-structural defects — 2 years from practical completion
  • Defects in workmanship — 1 year from practical completion

The statutory warranty sounds reassuring. In practice it has significant limitations. The warranty is only as strong as the builder behind it. If the builder enters administration, is deregistered, or simply doesn't have the resources to rectify the problem, pursuing a statutory warranty claim becomes extremely difficult and expensive — often requiring legal action that costs more than the rectification work itself.

For apartment buildings in NSW with a contract price above $20,000, developers are also required to obtain home warranty insurance under the Home Building Compensation Fund — but this only pays out if the builder dies, disappears, or becomes insolvent. It is not a general quality guarantee.

What 10 year latent defect insurance actually covers

Latent Defect Insurance (LDI) — sometimes called Structural Warranty Insurance or Building Defects Insurance — is a separate policy that sits over the top of all of this. The key differences are material:

  • It covers the physical structure of the building for 10 years from practical completion
  • It is policy-based — it pays out regardless of whether the builder still exists or has the funds to rectify
  • It transfers with the property on resale — so if you sell your apartment, the policy transfers to the new buyer
  • It typically covers major structural elements: foundations, load-bearing walls, roofing, waterproofing of the building envelope, underground drainage
  • The insurer is a rated insurance company, not the builder — claims are made against the insurer, not against the developer or builder
The key distinction in plain terms: A builder's statutory warranty is a promise from the builder. 10 year latent defect insurance is a policy from an insurer. If the builder folds — which is not uncommon in the construction industry — the statutory warranty becomes very difficult to enforce. The LDI policy pays regardless.

Why not all developers offer it

LDI is not mandated for all residential developments in NSW. It costs money — typically 1 to 3% of the construction cost — and it requires the developer to allow the insurer's engineers to inspect the build at multiple stages throughout construction. That level of scrutiny is something not all developers welcome.

Developers who obtain LDI are, in effect, having their construction quality independently verified by an insurer with a financial stake in the outcome. The insurer will not issue a policy on a building that doesn't meet its structural standards — so the presence of LDI is itself a signal that the build has been reviewed and approved by an independent party with real skin in the game.

When you see a development that carries 10 year LDI, it tells you:

  • The developer was prepared to absorb the cost of independent structural verification
  • An external insurer's engineers have inspected the construction at key stages
  • A rated insurer has assessed the structural risk and issued a policy
  • Your protection doesn't evaporate if the builder winds up after handover

What to look for in the contract and disclosure documents

If a development claims to offer 10 year LDI, ask to see the certificate of currency from the insurer before you exchange. Key things to confirm:

  • The insurer is a rated Australian or international insurance company — not an indemnity scheme or a related-party arrangement
  • The policy number and the name of the insured building match the development you're purchasing in
  • The policy duration — confirm it runs 10 years from practical completion, not from contract date
  • The scope of cover — confirm it includes structural elements and waterproofing, not just cosmetic finishes
  • The policy transfers on resale — confirm this explicitly in writing

Your solicitor should review the LDI documentation as part of your due diligence on the contract for sale. Do not rely on the developer's marketing materials as the sole source of information about the policy — ask for the actual policy documentation.

Sterling, Lane Cove — an example

Sterling in Lane Cove is one of the developments in the Stone New Projects portfolio that carries 10 year latent defect insurance. It is a completed building — you can inspect it, walk through the finished apartments, and have an independent building inspection carried out before you exchange. The LDI policy adds a structural guarantee over the top of that, for 10 years from practical completion.

For investors in particular, the transferable nature of the policy is meaningful. When you eventually sell the apartment, the buyer inherits the balance of the 10 year coverage — which is a genuine point of difference in a resale scenario.

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The budget has landed. Here's what it means for Australian property investors.
Negative gearing restricted from July 2027. CGT discount replaced. What changed and where capital is moving.
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Why Bali keeps coming up in Australian investor conversations
30% of Australians considering overseas property. What's driving the Asia preference.