Airbnb, Stayz swallowing up Aussie rental market
For some regional towns, the return of dwellings to Airbnb and other short-term accommodation websites is exacerbating existing rental shortages.
In some cases, renters have been evicted several times as property investors transfer homes to short-term accommodation marketplaces to attract higher yields.
It’s contributing to rental shortages around the world, with Airbnb listings actually surpassing the number of apartments available to rent in New York last week.
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Joel Dignam from Better Renting was concerned to see properties moving from the private rental market to Airbnb-style short-term accommodation.
“That is a real concern we hear from renters, and I think everyone's clear now that renters all over Australia are struggling to find an affordable rental,” Dignam said.
He said when properties were taken out of the pool, it made it hard for people to stay in the community long term.
“It feels pretty selfish really … these people are pursuing profits for themselves but in a way that's actually undermining the communities they're operating in,” Dignam said.
Professor Nicole Gurran, an urban planner and policy analyst from the University of Sydney, said holiday homes had always been part of Australia’s tourism infrastructure but platforms such as Airbnb had changed people’s perspectives on vacation homes.
“It introduced a way of people becoming instant tourist-accommodation providers,” Gurran said.
She said that in the lead-up to COVID, this short-term letting opportunity started to attract investors into regional markets that would otherwise have been considered lifestyle destinations.
“Before that, it wasn’t really a financial decision to own a home in these places.”
Areas such as the south coast and far north coast of NSW, and around the Mornington Peninsula in Victoria, were among the places to attract these types of investors.
For regional rental markets, which are always pretty tight because most people tend to own their own home in these parts, the influx of short-term accommodation listings was starting to cause problems.
That was until COVID hit and tourism collapsed.
While the return of short-term rentals to the conventional market improved rental availability in the cities, some regional areas faced a new form of pressure on their housing markets - people fleeing the cities to buy homes in cheaper markets, while working remotely.
Now, tourism is back on the agenda, and so is short-term accommodation in these key tourist hotspots.
For renters in these regions, Gurran said “it’s an absolute housing disaster” due to the loss of permanent rental stock, coupled with increased demand.
Eacham Curry, director, government affairs at Stayz, said short-term rentals were not causing housing challenges in tourist hotspots in NSW and Victoria.
“This is simply not the case,” Curry said.
According to the Real Estate Institute of Australia, the lack of affordable housing across the nation was due to not building enough homes over the past two decades.
“Limited housing supply and high costs to build mean that those looking to access cheaper, entry-level homes to rent are the ones most affected,” Curry said.
He said short-term properties on Stayz provided “much needed income for mum and dad homeowners, contribute to local tourism, and are often used for short term rentals only when family and friends are not using them as their holiday home”.
“Even if these homes were to become available for full time renting, most of them would never be considered ‘affordable’,” he added.
Regulation is needed in areas with rental shortages
Dignam said it was important for communities to have a bit more control over what was happening in their areas.
Regulation is key to taking back control, but the trick is not stymying the positive impacts of Airbnb and Stayz on communities.
Importantly, Dignam is all for people renting out rooms in their homes.
“That's a good thing - that’s a room that wouldn’t otherwise be available,” he said.
“What we've seen is people renting out entire dwellings and those dwellings aren't available for anyone to live in.”
Gurran said the way to manage short-term accommodation in markets with an undersupply of long-term rentals was to limit renting to the primary residence.
“As long as it's your own home, that’s fine, because that's not taking any homes out of the market.”
It’s possible to manage this by capping short-term accommodation for a certain time period, which allows people to rent out their homes while they are on holiday.
Dignam said caps tended to “discourage that sort of professionalisation of internet-based letting and try to make it more about people who want to live there and put down roots in the community.”
Gurran said governments would have to look seriously at regulation in areas with severe rental shortages.
“It’s not a sustainable situation,” she said.
In NSW, the state government has given councils the power to implement time caps on short-term rentals.
In Tasmania, the idea of higher council rates for short-term accommodation has also been raised by a local politician.
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