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.