There is a new call to cap the number of Airbnb-type properties, with new data showing that 74 per cent of new housing supply heads straight to the short-term rental market
Grounded Community Land Trust Advocacy’s report, From a Housing Problem to a Solution, found that short-term rental (STR) property owners are raking in profits at the expense of struggling renters.
Managing Director of Grounded Community Land Trust Advocacy, Karl Fitzgerald, said that the 11,935 STRs reviewed in the report delivered an average net profit of $48,980 each per annum to the owner – well in excess of what a property in the rental pool would generate.
“Short-term rentals such as Airbnb’s have enjoyed an 81 per cent higher return than investing in the long-term rental market,” Mr Fitzgerald said.
“The growth in STRs has been significant, with the equivalent of 74 per cent of new housing supply heading straight towards Airbnb.
“This has magnified the challenge renters and home buyers face in the never ending housing crisis.”
The report examined the impact of STR properties across tier one tourism communities in Hepburn Shire, Mornington Peninsula, Byron Bay, Fremantle, Victor Harbor, Hobart, Noosa Heads, Coolum Beach, Port Douglas, the Whitsundays, Warburton, and Apollo Bay.
The study ranked towns according to the profitability and saturation of STRs to LTRs, alongside the absorption of new housing supply into STRs.
The five most impacted communities were Warburton, Apollo Bay, Port Douglas, Noosa Heads and Hepburn Shire.
Apollo Bay and Noosa Heads both had twice as much stock on the STR market as the LTR rental market.
Warburton had next to no new supply, but STR had accelerated at a dramatic rate, taking away from existing rentals.
Mr Fitzgerald said that issues of STR’s greatly outweighing LTR rentals was not limited to tourism towns, pointing to the results of accommodation availability across inner-city communities in Melbourne, Sydney and Brisbane also showing the number of Airbnb’s significantly outweighing long-term rentals.
He said Canterbury in Sydney has 196 LTRs to 100 plus Airbnb’s, West End in Brisbane has 542 LTRs to over 100 Airbnb’s, while Moreland in Melbourne has 664 LTRs to 1000 Airbnb’s exacerbating the rental crisis.
Mr Fitzgerald said that an ‘Airbnb Cap n Trade’ system would be a better solution to the problem than a 90-day cap as proposed by Byron Bay council.
His system involves issuing a limited number of STR (short-term rental) licenses and capping the total number per municipality.
Every two years, a portion of these licenses would be reduced and auctioned off, allowing market forces to set their value.
Revenue from these auctions would fund affordable housing projects.
“The return on investment in STR will see more supply heading that way unless the government takes action and an ‘Airbnb Cap n Trade’ system is implemented to curb the growth,” Mr Fitzgerald said.
“Over time, the cap on the number of STRs reduces, and licence values increase.
He said the system rebalances the advantages of STR investment over LTR investment.
“Through this STR licensing system, Airbnb could improve its social licence by helping to address the problems at source,” he said.
“The 13 local councils could benefit from a potential $143 million in revenue which could then be reinvested into affordable housing.”
