Real estate: Pam Walkley
First-time buyers and renters face an even greater struggle as a result of short-stay competition
For residential property investors the rise and rise of sites such as Airbnb – which eliminate many gatekeepers from the short-term accommodation market – has provided a whole new lucrative source of tenants. But for renters and those struggling to buy their first home in areas close to major cities, it’s just another layer of competition.
Airbnb’s growing popularity is pricing first-time buyers out of homes, forcing up rents and displacing the most vulnerable home seekers to our city fringes, says Murray Cox, a Sydney-born, New-Yorkbased web analyst. His site InsideAirbnb. com monitors Airbnb’s rental data.
And the housing affordability problem sparked by tourists choosing to stay in suburban houses and units rather than stick to conventional hotel rooms is not isolated to Australia. It has become a global trend and is sparking a backlash.
In December 2016, theguardian.com reported on Airbnb’s struggle against local regulatory environments: “[Airbnb] has been engaged in protracted battles with city authorities in San Francisco, New York, Berlin, Barcelona and scores of other cities – often because it is blamed for eating into the housing stock.”
Berlin has banned the short-term rental of entire apartments to tourists without a city permit. And in London and Amsterdam, Airbnb has agreed to police limits on the number of days a year a full unit can be leased through its system – 90 days in London and 60 in Amsterdam.
With Australia’s federal and state governments under pressure to provide solutions to combat worsening housing affordability around major cities, local landlords engaging in short-term letting are on notice that their activities may be curtailed in the future, especially those renting out entire apartments or homes for short stays.
In NSW, recently installed premier Gladys Berejiklian has been urged by the
Owners Corporation Network (OCN) to consider giving strata residents and owners corporations the power to ban short-term letting of apartments through sites like Airbnb, arguing the practice is driving up rents. The OCN says a crackdown on short-term letting is “the first, easiest and cheapest step” to take to combat the issue of housing affordability.
In Sydney, where the median price was $1.066 million at January 31, according to CoreLogic RP Data, 61.9% of the 23,615 holiday lets available in December were for whole homes or units, according to Inside Airbnb. The interactive map on its website shows the vast majority of available properties are bunched in the eastern and harbourside suburbs, inner west and northern beaches.
Airbnb disputes that this is representative, saying it’s a snapshot at a specific point of time. It argues that the majority of Australian hosts rent out their primary properties “occasionally, for an average of about 51 nights each year”.
A study undertaken by the short-term rental facilitator in conjunction with BIS Shrapnel in 2013 found the overwhelming majority of Airbnb hosts occasionally share the home they live in and use the money they earn to help pay their bills.
But some, including Cox, dispute these findings. He argues the company’s advertising and marketing projects an “everybody wins” image that masks its true effects: that of displacing the most vulnerable residents who can’t compete with holiday rents.
This view is backed by a recent Sydney University report that says more than half the empty rental properties in Sydney’s holiday hot spots are likely to be listed on Airbnb. “It is clear that providers like Airbnb are not helping the affordability problem facing many Australians on low incomes,” says Professor Nicole Gurran, co-author of the report.
Melbourne has also seen an increase in properties available for short-term lease. In December 2016, there were 12,174 listings on Airbnb, up from 8663 in January, according to InsideAirbnb.com. Entire homes or apartments account for 56.6% of the listings.