Airbnb pointed at as rental prices drop

New Zealand rent prices recently dropped for the first time in a decade, leading some property experts to question if a contracting Airbnb market had caused the drop.

Renters in May were offered marginally cheaper prices than a year earlier, recent government rent data showed.

Auckland and Queenstown renters got even better deals with prices down 0.5 per cent and 9.5 per cent respectively last month.

Stats NZ said the rent drops coincided with rumours holiday homes were being converted into regular long-term rentals due to the lack of foreign tourists.

Data from analysts AirDNA showed the number of Airbnb and Vrbo holiday homes advertised in May and June fell significantly compared to the same months last year. However, AirDNA cautioned against interpreting the data as meaning Airbnb owners were converting holiday homes into rentals.

It said more than half of the world’s Airbnbs were not full-time rentals, meaning the number advertised for rent always fluctuated and that AirDNA didn’t expect to see a longterm decline in supply of Kiwi holiday homes.

Renters stand to be the winners should an inflow of former holiday homes push prices down.

House prices could also ease should investors view an influx of new

AirDNA cautioned against interpreting the data as meaning Airbnb owners were converting holiday homes into rentals.

rentals on to the market as reducing returns from buying new properties.

AirDNA’s data showed the number of holiday homes advertised for rent on Airbnb and Vrbo in June was

26,837 or 2877 fewer homes than in June 2019. The number of places offering private rooms for rent was

8682, down 4161 on a year earlier. AirDNA said converting holiday homes into long term rentals was expensive, especially with new regulations which require rentals to meet stringent health standards.

Kim Rae, who owns Stay Waiheke, a business that manages Waiheke Island holiday home rentals on behalf of owners, said none of her company’s properties had been converted into long-term rentals.

Weekend bookings for holiday homes also remained strong, she said.

David Faulkner from Real iQ, which gives advice to property management companies, said holiday home owners attempting to rent their properties out for longer needed to be careful. While holiday homes were exempt from Residential Tenancies Act rules, homes rented out longer than 28 days could suddenly become bound by the act.

That meant owners of holiday homes not meeting Healthy Homes standards could be fined.

Similarly, while Airbnb owners typically demanded full payment upfront, owners of homes bound by the RTA could only accept a maximum of four weeks rent upfront.

Holiday home owners violating these rules “were exposing themselves to substantial risk” and possible hefty fines, Faulkner warned. Ben Leahy