The rising concern that Short Term Rentals (STRs) are causing detrimental harm to local communities led to this analysis of 13 tourism markets across Australia. These are markets where the growth in STRs has had significant local impacts. At current market rates, STR earnings are 80.9% above Long Term Rentals (LTR). Any investor aware of the significantly higher return is bound to prioritise the STR market. Such a disparity may be playing a role in the exit of investors from the LTR market.

Housing affordability policy across all levels of government is almost entirely focused on housing supply. This research shows that within tourism areas, new supply is overwhelmingly directed towards the STR market, which is amplifying pressure on the LTR market. A more structured policy framework is required, and the author recommends a Locals First Airbnb Cap ‘n Trade system.

The study covered Hepburn Shire, Mornington Peninsula, Byron Bay, Fremantle, Victor Harbor, Hobart, Noosa Heads, Coolum Beach, Port Douglas, the Whitsundays, Warburton,and Apollo Bay.

Key findings

• $584.6m in net profits was enjoyed by STR owners across the 13 locales.
• The 11,935 STRs delivered an average net profit of $48,980 each p.a.
• Net returns were 80.9% higher for STRs over LTRs.
• STRs in the Whitsundays were most profitable at $60,125 p.a above LTRs.
• The equivalent of 74.2% of new housing supply was directed towards STRs - over a decade.
• Hepburn Shire, Byron Bay, Apollo Bay and Noosa Heads had more STRs than LTRs.
• These localities saw STRs absorb housing supply at a rate of 118%.
• The concentration rate of STR was extenuated in Apollo Bay (224%) and Noosa Heads.
• (208%) where STRs were more than twice the LTR supply.
• STR owners shared in a median $33.6m in economic rents (super profits) per locale.