Australia's short-term rental accommodation (STRA) sector has grown more than 10% in two years, reaching 174,558 listings by December 2024 — and new AHURI research finds the consequences for renters and long-term rental supply are being felt most acutely in high-demand coastal and tourist markets.
The sector is also far more professionalised than commonly assumed. While 43% of Australia's 171,416 Airbnb-platform listings in December 2023 belonged to individual single-property hosts, the remaining 98,384 listings were controlled by just 18,187 entities — a concentration that the research team from the University of Sydney, University of NSW, and University College Dublin says has material impacts on local rental markets.
The national context makes that impact more acute. Australia's residential vacancy rate rose to 1.2% in April 2026 — up fractionally from 1% in March but still less than half the pre-COVID balanced-market range of 2.5–3.5%, according to SQM Research's May 2026 bulletin. National weekly rents rose 7.3% year-on-year, with Perth, Adelaide, and Brisbane all sitting below 1%.
The housing consequences of STRA are starkest in tourist hotspots. In Hobart in December 2024, whole-property STRA listings outnumbered long-term rental vacancies by 36 to one. On NSW's South Coast, the ratio was more than 25 to one — properties withdrawn from the rental pool, pushing up costs for local residents and workers.
"In December 2024 in Hobart, STRA whole-property listings outnumbered long-term rental vacancies 36 to one, while Shoalhaven on NSW's South Coast had over 25 STRA whole-properties for every rental vacancy," said Nicole Gurran, lead researcher and University of Sydney professor.
One of the report's more counterintuitive findings is that financial returns are not the primary motivation for all short-term rental operators. Gurran's team found that metropolitan owners are more likely to be chasing yield, while many regional providers are primarily motivated by cost recovery on second properties — with the ability to still use the property themselves as an added attraction. This distinction matters significantly for how regulators approach the sector.
"Metropolitan owners were more likely chasing returns, while many regional providers wanted to offset costs of a second property, or sought non-financial benefits like property maintenance, while still being able to access the home for their own use," Gurran said.
She added: "Understanding motives is important for policy setting, as restricting STRA may not be sufficient to convert holiday homes into long-term rentals."
The research also found STRA was serving purposes beyond tourism — housing students, project-based workers, hospital visitors, and relocators near urban centres, and providing emergency accommodation in the aftermath of natural disasters. These functions complicate blanket regulatory approaches and highlight the need for policy that is calibrated to local conditions rather than applied uniformly.
The report identifies a significant regulatory gap between Australia and comparable jurisdictions in Europe and North America, where strong registration requirements, night limits, taxes, and renter protections have been more aggressively deployed. By contrast, Australian state and territory governments have been relatively slow to act, and local governments lack the reliable data needed to monitor or enforce existing rules.
The evidence from existing Australian interventions is sobering. In Hobart, a statewide permit system, mandatory platform reporting and financial incentives to convert STRA properties back to long-term rentals have all been trialled — yet the absence of a robust legal framework has continued to result in net losses of long-term rental stock. In metropolitan NSW, a registration requirement and a 180-night annual cap on un-hosted STRA have not resolved the underlying tension between the two rental sectors.
Effective regulation, the research concludes, requires compelling platforms to share timely property-level data, enforcing existing rules through user-based registration and well-resourced compliance mechanisms, and using financial tools such as levies — applied equally across all accommodation providers — to fund local infrastructure and discourage STRA relative to long-term rentals. All levels of government have a role, Gurran said.
"The federal government can reduce rental market impacts of STRA through national housing policy, taxation and housing assistance. State and territory governments can support STRA registration, land use regulations and renter protections, while enabling local governments to respond to specific community and market impacts," Gurran said.
For mortgage brokers with clients holding or considering short-term rental properties, the trajectory of regulation is increasingly relevant to lending strategy and investment advice conversations.
The research suggests the regulatory environment around Airbnb-style rentals is tightening — and that tightening comes alongside the federal budget's negative gearing and CGT changes, which are already prompting property investors to reconsider established property strategies and which Morgan Stanley has forecast could drive a 5–10% national house price correction. Investors who have relied on the current light-touch STRA framework may need to reassess their assumptions on two fronts simultaneously.
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