Real Estate

The unexpected downsides of short-stay accommodation

Written by The ReReport
As seen in the Source link, written by on 2019-10-25 04:34:01

Airbnb has changed the face of global tourism after giving traditional hotels a run for their money, and now the disruptive accommodation portal (and others like it) is making its mark on small town Australia and locals are being asked to have their say.

The rise in short-term leasing has been blamed for pushing up rents — or even knocking some rentals out of the long-term marketplace altogether — in some hot spots of Sydney and Melbourne, but the rise in full-time holiday homes is making an even larger impact in small lifestyle towns.

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Academics from Southern Cross University have partnered up with Destination North Coast and are calling for locals across 12 council areas in northern NSW (including the tourism towns of Port Macquarie, Coffs Harbour, Ballina and Tweed Heads) to have their say before October 31 on how short-term rentals are influencing their hometown.

After a similar study concentrating on the Byron Shire Council turned up some significant findings in March of this year, the same researchers are now keen to look beyond Australia’s busiest holiday destination.

What’s going on in Byron Bay

The Byron survey showed that almost 100 local residents (of more than 800 respondents) said they had been asked to leave rental properties for owners to list them on short-term platforms.

Dr Sabine Muschter, from the School of Business and Tourism at Southern Cross University said a further one-third were financially forced to leave town, or even the region.

According to research from the Australian Coastal Councils Association, Byron Shire has one of the least affordable regional rental markets with 17.6 per cent of all homes listed as short-term holiday lettings. Byron Bay now welcomes 2.1 million visitors a year, leaving a definite mark on a town with approximately 9000 permanent residents.

Of those Byron locals surveyed, 77 per cent said the phenomenon was responsible for a reduced availability of affordable housing for residents and 61 per cent said it increased property prices. Byron Bay now has the highest median house price in Australia at $1.3 million according to compared with Sydney at just over $900,000.

A national phenomenon

Australia-wide Airbnb listings are booming, particularly in coastal destinations. In April 2016 there were 58,210 listings on the portal, by December 2017 that had jumped to 130,665 and had reached 160,479 by the end of last year.

Dr Muschter said the current survey would hopefully give other local governments insight on how their communities are faring.

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“I’ve had many people in my circle of friends and acquaintances who have had to leave Byron. I also work at the Community Centre in Byron Bay and I see people on low incomes aren’t able to come and volunteer anymore because they’ve had to leave town. Some say they can’t even afford to travel into town to work or volunteer,” she said.

“Giving more opportunities for tourists to stay in town is, on one hand a good thing, but it does affect rental affordability (or not even just affordable rentals, often there just isn’t anything available to rent). So as a result you have a huge sense of insecurity among renters nowadays.”

Tania von der Heidt, senior lecturer in marketing at Southern Cross’ School of Business and Tourism, said the current survey is an extension of the Byron Bay research.

“We’re trying to capture the wider community views across those 12 councils and that way we can compare how residents feel across those different areas. The survey is meant to be a balanced one, we’re not here to point the finger at Airbnb or meet an agenda, it’s simply about collecting community views on the impact of short-term holiday letting,” she said.

The global crackdown

Local governments and councils across the world are reacting to the sharp rise in short-term rentals with some cities drastically reducing how often homeowners can “host” entire properties. In Los Angeles and Paris hosts are only allowed to place their properties on a short-term site for a maximum of 120 days a year, in Amsterdam it’s only 30 days and in New York City the minimum stay is 30 days at a time. Even the birthplace of Airbnb, San Francisco, has a 90-day limit.

A vast majority of international cities also require owners to register and report guests as well as pay a fee to their local council. Most of these restrictions only apply to whole properties that could otherwise be rented out full-time and don’t concern spare rooms or granny flats.

Australian rule-makers, however, have been slow to manage the negative side-effects of short-term leasing with only the NSW State Government passing legislation that will impact the trend.

New planning laws will allow short-term holiday letting under certain conditions. If the host is present, a home can be let short-term all year long. If the host is not present, the property can only be let for up to 180 days a year in greater Sydney. Councils outside of Sydney will have the power to limit letting — but no less than 180 days per year — with the exception of Byron Shire where 90 days can be enforced.

“One of the major reasons why we were keen to conduct this research in other coastal areas is because the government has a one-size-fits-all approach. They’re intending to have this legislation for short-term holiday letting which will apply to all of NSW. But obviously what’s a big issue in places like Byron, might not be a problem in other areas where they’re probably quite keen to increase their visitor numbers,” Dr Muschter said.

“Maybe with our findings, we can encourage the government to introduce a flexible legislation which allows councils to come up with their own solutions,” she added.

City versus country

Dr Laura Crommelin, research lecturer at the University of NSW’s City Futures Research Centre has looked into the impact short-term letting has had on major metropolitan property markets and said small towns could also be greatly affected.

“In general, the smaller the city or town, the more quickly something like short-term letting can have an impact. The thing for Sydney and Melbourne is that, on one hand, you actually have a lot more Airbnb, but they’re much bigger markets so the capacity to absorb and cope with change is greater,” she explained.

Dr Crommelin’s research with the Australian Housing and Urban Research Institute showed that while existing homeowners owners are benefiting from the rise of these platforms, prospective homeowners were finding entering the market more difficult as the possibility of short-term letting earnings could be translated into higher purchase prices. Her work also outlined that for tenants, there were few benefits as the rise in short-term letting is likely to cause greater uncertainty for prospective tenants seeking long-term rentals.

“In terms of negative impact, what we found in the big cities was that it’s very varied. You start seeing quite significant percentages of properties being used in this way in areas that are the most appealing,” she said.

“In Sydney it’s areas close to the coast or the CBD; it’s places with good connections to public transport with good services. The impact is that then pushes people out of those rental markets and into other parts of the city where it’s not so easy for them to get to work, and there aren’t as many jobs nearby. Overall, cities have the capacity to absorb it, but the shifts in those submarkets, like with smaller cities, is significant.”