After 10 years of Airbnb and short-stay rentals, is Australia ready for regulation? & More News Here

For six months after breaking apart along with her accomplice, aged care employee Adriana Breen searched for a rental dwelling on Victoria’s Mornington Peninsula.

“The rental market was just non-existent,” she mentioned.

“The rents were unaffordable as well. You’re looking at $400-plus where they used to be $280.”

Ms Breen nonetheless works on the peninsula, however she now not lives there.

Instead, she has to drive the 80-kilometre spherical journey from Frankston, in Melbourne’s south-east, every single day.

“Mentally it affects me because this was my happy place — I love the peninsula,” she mentioned.

“I know it’s only half an hour down the road, but it could be on the other side of the Earth as far as I’m concerned because I’m not near my family.”

Ten years in the past the Mornington Peninsula had a “healthy” rental emptiness fee of 3 per cent.

Now it has a fee of 0.7 per cent, and — in line with consultants from InfacetAirbnb, an unbiased advocacy and knowledge group — for each vacant rental, there are about 30 short-stay leases out there on Airbnb.

“Non-metropolitan Australia has … always had tight rental markets,” city planner and coverage analyst Nicole Gurran mentioned.

“Even a small increase — and we’ve seen a significant increase — in demand for housing associated with the short-term tourism market is going to exacerbate those tight rental vacancy rates.” 

But coastal communities are going through greater than a rise in short-term lodging. During the pandemic, folks have fled the cities and moved to regional areas.

“With the increase in demand from people moving to coastal locations … combined with the increase in tourism demand, that’s created a perfect storm in which rental vacancy rates are pitifully low,” Professor Gurran mentioned.

There are about 100,000 Airbnbs properties throughout Australia, in line with figures from knowledge group AirDNA. About 85 per cent of these are total properties.

And whereas short-term stays have at all times been fashionable in coastal areas and tourism hotspots, when it launched in Australia 10 years in the past, Airbnb introduced vacation properties to capital cities.

“In Australia we haven’t had a tradition of having holiday homes in our major cities,” Professor Gurran mentioned 

“So when we see the cluster of short-term rentals around [our big cities] it’s safe to assume that those are residential homes and apartments that have been withdrawn from the permanent rental market.”

The COVID-19 impression

The sharing platform says it has boosted native economies by attracting vacationers and creating jobs.

An Oxford Economics report discovered Airbnb contributed greater than $10 billion to Australia’s financial system in 2019.

But a 2019 report by America’s Economic Policy Institute discovered that Airbnb’s financial advantages had been outweighed by the fee to renters.

Then in 2020, international tourism floor to a halt.

“COVID really showed there’s a connection between the short-term rental market and rents all across Australia, and indeed across the world,” housing researcher Peter Phibbs mentioned.

In the Tasmanian capital of Hobart, residents have been within the midst of a housing disaster that predates COVID-19.

Professor Phibbs mentioned the quantity of Airbnbs within the metropolis equated to about 9 per cent of the overall rental market. 

That is a lot larger than in every other capital metropolis in Australia.

And Hobart’s rental emptiness fee is simply 0.3 per cent — the bottom for any capital metropolis.

During the pandemic, the stability has shifted.

“When housing stock went from short-term rental back to the long-term rental market, in places like Hobart we saw a sharp reduction in rents,” he mentioned.

Professor Phibbs estimated that in COVID, rents in Hobart dropped by about 9 per cent. 

Another examine in Sydney by William Thackway and Christopher Pettit discovered lease costs in probably the most lively Airbnb neighbourhoods dropped by as much as 7 per cent.

While not all of this may be attributed to Airbnb, Professor Phibbs mentioned the proof was clear: You can not have an unregulated short-term lodging trade and a wholesome long-term rental market. 

“Those two things just can’t co-exist,” he mentioned.

“We need some sort of regulation to limit the spread of short-term rentals so we can enable the long-term rental market to provide homes for so many households that are looking for them at the moment.”

A query of regulation

Across the world, main vacationer locations are shifting to regulate short-stay leases.

In Amsterdam, a complete dwelling can solely be rented out for a most of 30 nights per 12 months.

While in New York, it is typically unlawful to lease out a complete unit for lower than 30 days. Although there are exceptions.

Meanwhile, Berlin permits you to lease out your major residence, however it may be a bit tougher to place a second dwelling on the short-term market and you possibly can solely let a secondary residence out for a most of 90 days.

“Making the regulation is probably the easy part,” Professor Phibbs mentioned.

“Enforcing the regulation can be quite difficult. It’s certainly resource-intensive. It sometimes involves quite long legal processes.

“It’s necessary to have some sort of taxing regime the place short-term leases pay for the fee of that regulation by some type of mattress tax.”

In Australia, New South Wales has 180-day caps in some areas, while Western Australia has been investigating a 60-day cap.

Meanwhile, Hobart is hoping to turn out to be the primary capital metropolis to put a cap on the quantity of brief stays.

If successful, it will stop any more entire homes from becoming short-stay accommodation.

But it could take a while to change the planning scheme, and in the meantime it could prompt a rush on converting homes to short stays.

Professor Phibbs mentioned it was a blunt possibility, however the one one out there to the council.

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