2019-02-12 Attachment 1 to Item 7 - Short Term Accom Online Platform Issues Paper

Whilst it has merit to contend that the transition of long-term rental properties and properties
circulating through the ownership market is eroding affordable rental housing stock to the detriment
of communities, there are also a number of other macro-economic factors that have likely
contributed. The proportionate effect of Airbnb and Stayz against other factors such as low interest
rates and significantly higher property prices in Australia’s capital cities is not entirely clear. However,
the recent Laura Crommelin et al. report for the Australian Housing & Urban Research Centre, which
looked at Sydney and Melbourne only, noted that rental affordability is likely being impacted by
Airbnb in high-demand inner-city areas with significant tourism appeal20.

The Gurran et al. report for the Australian Coastal Councils Association notes that in some localities,
attempts to increase housing supply for low income residents by way of new residential
developments, including detached homes and medium density apartments, has resulted in those
properties being purchased by investors to list as holiday rentals. Thus efforts to introduce affordable
housing may be taken instead by investors looking at short-term rental returns. Interviewees in
localities within a three hour radius of capital cities – Mornington Peninsular (Melbourne),
Eurobodalla (Canberra), Kiama and Shoalhaven (Sydney), Byron and Sunshine Coast (Brisbane) all
reported increased housing demand by investors looking for a lower priced entry into the property
market. However, they also reported aggressive marketing by real estate agents of properties with
potential holiday rental returns. The report concluded that, ‘in these locations, the rise of online
platforms may contribute to house price inflation, making it more difficult for home buyers to achieve
home ownership’19.

There is also increasing evidence from overseas jurisdictions that the arrival of Airbnb and other
such platforms has had a direct impact on housing affordability, increasing permanent rental prices
and land values.

Further to the issue of affordable housing, it is regularly suggested that Airbnb offers necessary
additional income for home hosts, particularly retirees or those on fixed incomes. This may have had
some truth in the early days of the online short-term letting industry, however, research does not
support this theory today.

The Gurran et al. report notes that, ‘the proportion of households who offer rooms or shared rooms
to tourists, remains small – less than one per cent in the majority of the case study communities.
Although home sharing represents a source of income for a small sector of the population, overall it
does not represent a solution to wider housing affordability pressures’.

This view is supported by a November 2018 Australian Housing and Urban Research Institute report
by Laura Cromelin et al. which concludes that, ‘hosts are primarily focussed on financial gain in
choosing to engage in short-term letting, and do so more for discretionary spending than to cover
pressing housing expenses’20.

Currently reduced housing affordability and loss of permanent rental stock are key issues for the
Noosa shire.




Short Term Accommodation - Online Platform Response Issues Paper                                    Page 15