Disruption turfs out tenants
Popular short-term letting (STLs) platforms such as Airbnb are placing significant upward pressure on rental prices in popular tourist areas around the country, with as much as one in seven rental properties in popular Sydney and Melbourne suburbs being used on the platform.
According to research undertaken by the Australian Housing and Urban Research Institute, short term letting platforms are reducing the availability of long term rentals and are contributing to a significant affordability increase in popular areas.
In Sydney, commercial Airbnb listings are concentrated in the eastern suburbs (e.g. Bondi, Bronte and Coogee), Darlinghurst and Manly. In these suburbs Airbnb accounts for between 11.2 per cent and 14.8 per cent of all rental housing stock.
In Melbourne, commercial Airbnb listings cluster in Central Melbourne, Docklands, Southbank, Fitzroy and St Kilda, accounting for between 8.6 per cent and 15.3 per cent of rental housing stock.
“As rental markets in Sydney and Melbourne are unaffordable for lower income renters, even a small reduction in available rental properties is concerning”, said lead researcher Dr Laura Crommelin from UNSW.
“For tenants living in the ‘high demand’ suburbs there could be an increased risk of having their lease terminated if the owner decides it is more profitable or convenient to list the property on Airbnb instead.”
Compared to other markets, Sydney and Melbourne have relatively unrestrictive STL regulation.
An examination of policies in Sydney, Melbourne and nine key overseas jurisdictions, including London, New York City and Paris, found there are three broad approaches to regulating STL:
a permissive approach—where STL is mostly allowed without prior permission or notification.
a notificatory approach—where STL is mostly allowed, provided the host first notifies an authority.
a restrictive approach—where STL is mostly banned, or allowed only where an authority gives specific permission.
The full report can be found here