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Report demolishes Airbnb's residential rental myth
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08/11/2018 - 1:09 am
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A new report has blown major holes in three of the myths at the heart of the Airbnb short-term letting pitch.

According to a study by the Australian Housing and Urban Research Institute (AHURI), and contrary to the online holiday letting giant’s constant refrains:

  • Airbnb does profoundly affect the residential market rental market
  • Airbnb hosts aren’t mostly letting rooms to make ends meet
  • And, despite insisting that Airbnb holiday lets are taking to tourists to places they wouldn’t normally go in our cities, they are actually concentrated in small, high tourist appeal areas.

The AHURI report, Technological disruption in private housing markets: The case of Airbnb, highlights two ways in which short-term holiday letting (STHL) platforms like Airbnb are reshaping housing opportunity in private markets in Sydney and Melbourne:.

Firstly it’s through their direct impact on availability in local areas, and – more profoundly – by influencing our views and behaviour towards housing.

The report’s key conclusions include that despite limited growth in suburban areas, geographically, Airbnb in both Sydney and Melbourne remains concentrated in high-demand inner city areas.

Where Airbnb is most active, says the report, decreases in rental bond lodgements and increasing levels of property vacancy, both point to the likelihood that holiday lets are “removing properties from the long-term rental market, thereby contributing to increasing unaffordability.”

Also, it says, while  the impact on affordability across the cities as a whole may seem limited, tenants seeking long-term housing will face “markets that are more complex and uncertain.”

The report also explodes the myth that hosts are letting rooms to cover pressing housing expenses, saying they are “primarily focussed on financial gain in choosing to engage in STL, and do so more for discretionary spending.”

Worryingly for the future of the residential rental market, many of the hosts interviewed said they would factor the possibility of Airbnb hosting into their future property decisions.

“Despite these impacts, current regulatory proposals in NSW and Victoria take a very permissive approach to regulating STHL, compared to cities overseas,” says the report, suggesting four ways to strengthen regulations:

  • a registration system for STHL listings, to facilitate enforcement
  • additional localised strategies to limit STHL and ensure adequate affordable rental supply in areas of intense STHL use
  • limiting commercial STHL – multi units operated by single entities – within a broad-ranging, integrated housing policy
  • ongoing research into STHL across our cities and regional areas to ascertain its impact on housing and urban planning, supported by access to detailed, up-to-date data.

The AHURI report comes as the NSW government is hosting consultations with stakeholders to devise a code of conduct for hosts and their guests.

It is strongly believed that a registration system – where Airbnb hosts must register their properties with local councils and pay tax on their profits –  will not see the light of day.

Airbnb has already fought and lost a battle on that in New York where they were projected to lose half their listings as illegal lets checked out of the system.

Luckily for them, Australian politicians are easily scared by the very real threat of organised social media campaigns around election time.

Wim Jansen
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10/11/2018 - 9:12 am
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the registration of short-term letting has striking resemblance to the recent taxi industry versus Uber.

motel owners that include tax rates in their rental charges would surely wish that short term let’s are subject to similar tax costs

Don Binkley
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12/11/2018 - 3:53 pm
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Why? Why is nobody asking Why?

More often than not short-term rentals are inextricably linked to Airbnb and 1-4 night stays for the holiday or tourist market.  The reality is that there is a huge difference between the mindset of someone visiting and someone who is living.  I have been leading an agency that has been doing short-term rentals in Sydney for 8 years.  We actually prefer not to use Airbnb for a whole host of reasons including the stigma that comes along with the channel.   What I find very perplexing is that nobody is actually asking “why” people need short-term rentals.  I can advise through experince (and with an average stay of over 3 weeks) that the majority of our guests/tenants are locals requiring temporary accommodation for including but not limited to 

– International corporate relocation

– Medical (patients and speciality hospital staff)

– In between buying and selling

– Local renovators

– Empty Nester’s trailing downsizing

– Insurance claims 

– Project based work assignments (often very very senior people)

– Temporary accom for divorce and separation.


Check out this and other insightful elements on short-term renting at our blog – https://blog.propertyproviders.com.au



Pyrmont Building Manager
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19/11/2018 - 4:36 pm
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Re STL taking properties out of the rental market: A reduction in rental bonds is just the tip of the iceberg.
In an apartment building I manage at Pyrmont NSW we have shut down 27 STL’s since 2014. Only one of these was hosted by an owner. The remaining 26 were hosted by tenants/lessees (22 entire apartments and 4 where the apartment was also the hosts principal place of residence). ALL 26 of these STL’s were done without the host seeking permission from the owner, leasing agent, owners corporation or the council (and STL was against the council development consent for this building; now overturned by NSW parliament in August)
So 26 out of 27 properties had a rental bond lodged but were used for STL; where’s that is AHURI’s statistics?
Airbnb listings are split roughly 50/50 between entire homes and spare rooms.
Generally, spare rooms are less desireable for privacy, not available all the time, are more likely to be an owner occupied property and not overcrowded. Apparently there are many dormant spare room listings on Airbnb, which are used to distort statistics to their advantage.
Entire homes are mostly hosted by lessees (tenants not in residence), without owners consent, by commercial operators hosting multiple properties, are available all the time and usually with high occupancy rates and with naturally with higher nightly rates because it’s a whole property. ALL the listings in my building were advertised for overoccupancy (like one bedrrom unit to accommodate 6 or 8 persons); this is Airbnb’s price advantage over hotels.
From all this, it’s obvious that Airbnb would be deriving probably 80 or 90% of their commissions from entire home listings hosted by commercial operators, and without being detected through the rental bond data base.

Lady Penelope


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19/11/2018 - 5:18 pm
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Pyrmont Building Manager – Is it legal or illegal in NSW to sub-let an apartment if you are a Tenant?

I leased out my apartment in QLD for a period of 3 years several years ago …. and from memory sub-letting was not allowed in the Tenancy Agreement. I am not sure if that is the same situation in NSW???

If tenants do the wrong thing and sub-let without owner permission then can they be put on a tenant ‘black list’?

A lot of STRs would disappear if the tax department became more involved in rooting out the tax ‘cheats’.

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20/11/2018 - 11:51 am
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Sub-letting is not illegal but if it’s specifically forbidden in the lease then it’s a breach and the tenant can be evicted. I’ve heard of dozens of cases where “head tenants” lease and apartment and immediately move in dozens of bunk beds for multi-occupancy sub-lets.  They are rarely caught by the landlord because they ALWAYS pay their rent on time.

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