This study looks at how short term letting (STL) platforms like Airbnb, HomeAway and Booking.com are reshaping housing opportunity in private markets. It analysed Airbnb listing data from Sydney and Melbourne to reveal insights into the extent STL is contributing to housing affordability issues and to highlight the most effective responses available to regulators.
The impact of short-term letting
The research points to two ways in which short-term letting (STL) platforms like Airbnb are reshaping housing opportunity in private markets in Sydney and Melbourne: through direct availability impacts in localised areas, and by influencing views and behaviour towards housing more broadly. Key findings supporting these conclusions are:
- Despite some limited growth in more suburban areas, the spatial impact of Airbnb in both Sydney and Melbourne remains concentrated in high-demand inner city areas. In these areas, two factors—decreasing bond lodgement rates, and increasing levels of property vacancy—point to the likelihood that STL is removing properties from the long-term rental market, thereby contributing to increasing unaffordability.
- While the city-wide affordability impacts may be limited, those seeking longterm housing will face markets that are more complex and uncertain.
- Hosts are primarily focussed on financial gain in choosing to engage in STL, and do so more for discretionary spending than to cover pressing housing expenses.
- Many of the hosts interviewed also indicated that they would factor the possibility of Airbnb hosting into their future property decisions.
Current regulatory approaches
Despite these impacts, current regulatory proposals in NSW and Victoria take a very permissive approach to regulating STL, compared to cities overseas. The research findings suggest four ways to strengthen regulatory responses to STL:
- the inclusion of a registration system for STL listings, to facilitate enforcement
- additional localised strategies to limit STL and ensure adequate affordable rental supply in areas of intense STL use
- the integration of measures to limit commercial-style STL within a broadranging, integrated housing policy, which reflects the changing nature of housing markets and the complex drivers behind these shifts
- the development of an ongoing research agenda into STL across our cities and regional areas and its impact on housing and urban planning outcomes, supported by access to detailed, up-to-date data.