New research suggests that housing affordability is being affected by short term letting such as Airbnb.
The report from the Australian Housing and Urban Research Institute (AHURI) said it is “reshaping the market” for investors and that people are willing to pay more for homes that have the potential for short term letting.
Properties listed on the platform account for nearly one in seven rental properties in popular Sydney and Melbourne suburbs, according to the report.
The research identified that commercial Airbnb listings, whole dwellings that are available for more than 90 days each year, in both Sydney and Melbourne are concentrated in inner-city and beachside suburbs.
This reduces the availability of long-term rentals and creates further affordability pressure in areas that are generally well connected by public transport and within access to employment hubs, essential services and amenities.
In Sydney, commercial Airbnb listings are concentrated in the eastern suburbs, Darlinghurst and Manly. In these suburbs Airbnb accounts for between 11.2% and 14.8% of all rental housing stock.
In Melbourne, commercial Airbnb listings cluster in Central Melbourne, Docklands, Southbank, Fitzroy and St Kilda, accounting for between 8.6% and 15.3% of rental housing stock.
Dr Laura Crommelin from University of New South Wales, said, “We found some evidence that Airbnb is reshaping the market for investment properties in Australia.
“For example, real estate agents have been cited claiming investors will pay a 2 to 3% premium for properties that show a higher-yielding Airbnb income stream.
“Similarly, Airbnb property managers told us their businesses have been growing rapidly, as some investors are achieving better returns on short term letting than long term rental.”
Compared to other markets, Sydney and Melbourne have relatively unrestrictive short-term letting regulation.
The AHURI report recommended that Melbourne and Sydney take on a ‘notificatory approach’, where short term letting is mostly allowed as long as the host first notifies an authority.
This would give hosts an identification number allowing local and state governments to check compliance with limits on days let and restrictions on listing multiple properties.