Airbnb Home-shar­ing or home-snar­ing?

Is the short stay rental boom wors­en­ing the hous­ing short­age? Nikki Mac­don­ald re­ports.

Taranaki Daily News - - Magazine -

‘Wel­come to the new way to in­vest,’’ says one Airbnb man­age­ment com­pany. ‘‘Short-term rentals can earn a lot more than long term rentals,’’ trum­pets another.

In the wake of $1000-a-night pay­days for Lions rugby tour rentals, Ki­wis are wak­ing up to the pos­si­bil­i­ties of let­ting their homes on short-stay rental sites such as Airbnb and Book­abach.

And what’s not to love – home­own­ers can make a few bucks while they’re out of town; ab­sen­tee land­lords free up empty space for the nine months they’re over­seas; cities get flex­i­ble ac­com­mo­da­tion for big events; and tourists get a unique win­dow on how New Zealan­ders re­ally live.

But glob­ally, tourist hotspots are re­al­is­ing the phe­nom­e­nal growth of whole homes be­ing rented out full-time on Airbnb is tak­ing prop­er­ties out of the per­ma­nent hous­ing and rental mar­ket.

Fig­ures and anec­dotes show the same is hap­pen­ing here, es­pe­cially in Queen­stown and Auck­land.

What’s harder to un­pick is just how much im­pact – if any – the trend is hav­ing on the abil­ity of or­di­nary Ki­wis to find a place to call home.

An­drew Mur­ray knows Auck­land apart­ments. He spe­cialises in sell­ing them and owns two that he rents for vis­i­tor ac­com­mo­da­tion on Airbnb.

It’s still early days, but there’s no doubt cen­tral Auck­land apart­ments are be­ing rented out full-time on short-stay web­sites.

It’s ba­sic math­e­mat­ics, he says. His one-bed­room apart­ment in the Scenic Ho­tel com­plex might fetch $450 a week long term. When it’s put on Airbnb, he clears about $700 a week, af­ter pay­ing a man­age­ment com­pany to sort book­ings and clean­ing. His sec­ond prop­erty – a high-end, twobed­room apart­ment in the Me­trop­o­lis build­ing, would make about $1000 a week as a long-term rental.

‘‘I get about $1700 a week net, with less wear and tear. You can’t re­ally ar­gue with that.’’

One of Mur­ray’s apart­ments was pre­vi­ously rented to Auck­land lo­cals, the other was leased to a ho­tel. He es­ti­mates about half the Auck­land apart­ments sud­denly ap­pear­ing on Airbnb were pre­vi­ously ho­tel rentals, so they’re not de­plet­ing the per­ma­nent rental sup­ply. But if Airbnb con­tin­ues to grow, it could af­fect the hous­ing short­age, he says.

‘‘It’s got the po­ten­tial to get big, but it’s a blip on the radar at the mo­ment.’’

The short-stay boom has spawned a clutch of man­age­ment com­pa­nies de­signed specif­i­cally for Airbnb and Book­abach-type rentals.

Ste­fan Nikolic was so im­pressed with how lu­cra­tive his Queen St apart­ment proved on Airbnb last year he started Zo­diak, to man­age CBD apart­ments for others want­ing sim­i­lar re­turns, with­out the work of man­ag­ing book­ings, greet­ing guests and or­gan­is­ing clean­ing.

Aaron Martin runs Auck­land’s largest and long­est-run­ning Airbnb man­age­ment com­pany, My Ho­tel, which man­ages 120 prop­er­ties. Most of his own­ers are in­vestors and many are now buy­ing apart­ments specif­i­cally as short-term rentals, he says. He doubts Airbnb apart­ments are af­fect­ing the broader rental mar­ket, as the sky­line is alive with apart­ments un­der con­struc­tion.

How­ever, My Ho­tel is also branch­ing out into full time rent­ing four- and five-bed­room for­mer fam­ily homes in Grey Lynn, Pon­sonby and Par­nell. The com­pany’s also ex­panded into Welling­ton and is in­ves­ti­gat­ing Christchurch op­tions.

Joanne Bar­reto, pres­i­dent of the Strata Com­mu­nity As­so­ci­a­tion, which rep­re­sents body cor­po­rates, says Airbnb’s growth is hav­ing a huge im­pact in apart­ment build­ings. Com­plaints range from com­pro­mised se­cu­rity to ex­ces­sive par­ty­ing. In Mel­bourne, apart­ment res­i­dents forked out $100,000 in le­gal fees on a failed at­tempt to ban Airbnb. ‘‘Peo­ple think they can just ban it. But you just can’t.’’

Bar­reto wants clearer reg­u­la­tions on what apart­ment own­ers can and can’t do. That might be coming – Auck­land Coun­cil has in­tro­duced a new tar­geted rate for ac­com­mo­da­tion providers and is con­sid­er­ing how that can be ap­plied for Airbnb-type rentals.

You don’t have to hunt hard to find sto­ries of slum rentals in tourism mecca Queen­stown. In Au­gust, the dis­trict’s av­er­age rents were the high­est in the coun­try at $575 a week, out­strip­ping Auck­land. Ev­ery­one agrees there’s a des­per­ate short­age of rentals to ac­com­mo­date the town’s mush­room­ing pop­u­la­tion, which in­cludes tradies lured in by the con­struc­tion boom and trav­ellers pulling pints for ev­er­grow­ing tourist num­bers.

What’s less clear is Airbnb’s role in that. Airbnb it­self failed to specif­i­cally com­ment on the Queen­stown sit­u­a­tion, with its Aus­trala­sia head of pol­icy, Brent Thomas, say­ing, ‘‘blam­ing Airbnb for hous­ing un­af­ford­abil­ity is as ab­surd as blam­ing smashed av­o­ca­dos’’. With low wage growth and high liv­ing costs, the abil­ity to make ex­tra cash on Airbnb makes hous­ing more af­ford­able, not less, Thomas ar­gues.

Airbnb al­ways quotes the av­er­age num­ber of nights hosted per year – 44 in the case of Queen­stown – to sup­port its ar­gu­ment. How­ever, av­er­age fig­ures pro­vide lit­tle in­sight into the use of Airbnb for full-time, short-term rentals, as they are skewed by the large num­ber of peo­ple who only rent their prop­erty for a few days a year when they go away.

Fig­ures from anal­y­sis com­pany Airdna tell a dif­fer­ent story. Of 1143 ac­tive list­ings in Queen­stown, three-quar­ters are en­tire homes and more than half (52 per cent) are avail­able for 7-12 months of the year, which is deemed full-time.

The hitch is, there’s no know­ing where those prop­er­ties have come from: whether they’re owned by ab­sen­tee land­lords and were pre­vi­ously ly­ing empty; whether they’re gar­den bed­sits that home­own­ers wouldn’t want per­ma­nently oc­cu­pied; or whether they would oth­er­wise be avail­able to Queen­stown lo­cals des­per­ate for a per­ma­nent home.

Trade Me also runs its own short-term rental site, hol­i­day­houses.co.nz. The com­pany’s head of prop­erty, Nigel Jef­fries, ac­knowl­edges the short­stay mar­ket has grown hugely, but does not be­lieve it’s af­fect­ing per­ma­nent rentals.

Keith Hibbs, of Queen­stown Har­courts prop­erty man­age­ment, is also scep­ti­cal of Airbnb’s im­pact, as none of the hun­dreds of long-term rentals he man­ages have been switched to the short term tourist mar­ket.

Along the lake and up the hill from cen­tral Queen­stown, Priscilla Uhrle has a slightly dif­fer­ent per­spec­tive. The Har­courts sales con­sul­tant and Fern­hill res­i­dent says her sub­urb has al­ways had lots of short-term hol­i­day rentals and she doubts Airbnb has changed that.

But it has eroded the sup­ply of rooms avail­able to tran­sient work­ers. She’s still rent­ing her spare room to an over­seas cou­ple work­ing in hos­pi­tal­ity who’ve been there al­most 12 months, be­cause she can’t be both­ered with the work in­volved with short stays. But others are switch­ing.

Queen­stown Lakes Dis­trict Coun­cil plan­ning pol­icy man­ager Ian Bayliss is try­ing to es­tab­lish ex­actly how short term rental sites are be­ing used, and what to do about it.

Airdna data show vis­i­tors stayed 277,000 nights in Airbnb prop­er­ties in the dis­trict in the 10 months to July. That’s 14 per cent of all stays – the ma­jor­ity are still in com­mer­cial ac­com­mo­da­tion.

Short-stay rentals help meet tourist peaks, help home­own­ers off­set high hous­ing costs and pro­vide a cheaper hol­i­day op­tion for fam­i­lies, Bayliss says. But the boom also has risks.

‘‘We’re con­cerned about re­duc­ing the im­pacts on res­i­den­tial hous­ing sup­ply and the in­creased hous­ing costs, rents and un­cer­tainty for ten­ants that go along with the ram­pant growth of vis­i­tor ac­com­mo­da­tion.’’

In July, the coun­cil in­tro­duced dif­fer­en­tial rates – if you rent to vis­i­tors for more than 28 days a year you pay 25-35 per cent more; more than 90 days and you need re­source con­sent; more than 180 days and you pay com­mer­cial rates (50-80 per cent more). But a small coun­cil can’t closely mon­i­tor that, Bayliss says.

The coun­cil is also con­sid­er­ing ap­proaches taken over­seas.

Down Happy Val­ley, past the tip, is Welling­ton’s fa­mous con­tainer house. For­merly the home of ar­chi­tect Ross Stevens, its quirky in­te­rior is now of­fered full-time as a short-term vis­i­tor rental. Other Welling­ton prop­er­ties be­ing ap­par­ently rented full­time as vis­i­tor ac­com­mo­da­tion in­clude a three-bed­room bun­ga­low in Lyall Bay and sev­eral city apart­ments. The con­tainer house is owned and man­aged by Giles Mid­dle­ton, who also man­ages another three prop­er­ties for ab­sen­tee own­ers.

Tak­ing prop­erty out of a stretched rental mar­ket is an eth­i­cal dilemma, he ad­mits. Ac­cord­ing to Trade Me fig­ures, new rental list­ings in Welling­ton city fell 5 per cent, 8 per cent and 13 per cent re­spec­tively in the past three years and rental view­ings have drawn queues of 40 peo­ple. How­ever, Mid­dle­ton says he pro­vides a venue for mem­o­ries for young and old and pays more tax than a long-term rental, which is ex­empt from GST. The Welling­ton re­gion ap­pears un­der less pres­sure than Auck­land and Queen­stown, with en­tire homes mak­ing up less than half of ac­tive list­ings, and only 26 per cent avail­able full-time. Welling­ton City Coun­cil says it has not no­ticed an im­pact on the hous­ing mar­ket, although there have been anec­do­tal re­ports of pres­sure on high-end in­ner-city rentals. Short-term rentals for fewer than five guests are al­lowed un­der the Dis­trict Plan, but full­time short-stay rentals are sup­posed to pay com­mer­cial rates, which are 2.8 times the res­i­den­tial rate.

Back in Queen­stown, plan­ner Ian Bayliss hopes to have re­al­is­tic so­lu­tions for pub­lic sub­mis­sion by the end of the year. ‘‘What we’re want­ing is some­thing we can man­age con­sis­tently that re­ally tar­gets the more prob­lem­atic end – which is where peo­ple might buy a house purely for the pur­poses of putting it on Airbnb with no in­ten­tion to ever make it avail­able for res­i­den­tial ac­com­mo­da­tion and it’s the whole house be­ing rented out ... it’s just es­sen­tially a ho­tel in a res­i­den­tial area.’’

‘‘It’s got the po­ten­tial to get big, but it’s a blip on the radar at the mo­ment.’’

An­drew Mur­ray, of Auck­land’s Apart­ment Spe­cial­ists.

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