Why Airbnb is contributing to the sharp rise in rents
More property investors are renting out their homes through Airbnb and similar platforms, which is reducing the number of properties in the long-stay rental market and pushing up rents, according to a new report.
The Real Estate Institute of Australia (REIA) in its ‘Short Stay Accommodation’ report, said 133,968 short-stay accommodation (SSA) places were available in Australia in the March quarter, which was 3.7% higher than the previous quarter and 22.8% higher than the previous year.
By contrast, the REIA estimated Australia would face a shortfall of 106,000 rental dwellings by next financial year.
REIA President Hayden Groves said SSA was “a driving factor behind the rental crisis”, because 81.9% of short-stay listings were suitable for being transferred to the long-term market.
“Dwellings suitable for long-term rentals increased on short-stay accommodation platforms 3.7% over the quarter and 26.6% over the past year. The eastern coast of Australia is the predominant provider of short-term accommodation, and where most of the crucial long-term housing is desperately needed,” he said.
Why some investors and agencies prefer SSA
The reason an increasing number of property investors are favouring the short-term over the long-term market is because the former offers higher rates of return, according to REIA data.
For example, in the March quarter, the median annual rent for a two-bedroom home in Sydney was $33,900; an investor could earn the same income in just 122 days by renting out the same property on a SSA platform. In Melbourne, the figures were $27,100 and 124 days.
Some real estate agencies also prefer short-stay to long-stay, because they can charge higher fees.
“State and federal governments continue to grapple with how to quickly deal with Australia’s severe housing shortage across all housing segments: public, social, affordable, private rental and home ownership,” Mr Groves said.
“This report set out to quantify in an objective, fact-based way what the impacts of SSA are on renters; so we can look to formulate a policy response together with government and short-stay accommodation providers based on the best available evidence.”
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