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

4.4.1      Permanent Rental Market

Key aspects of the permanent rental market are affordability, suitability and availability.

    Affordability      Rent is no more than 30% of a household budget.
    Suitability        Appropriate for the number of people or the family type.
    Availability       Sufficient permanent rental stock.

As a highly sought after and affluent coastal location, the permanent rental housing and unit stock
has provided an affordable living option for many of the region’s residents working in industries such
as retail trade, accommodation, food services and real estate services (rental and hiring).
Traditionally, Noosa has enjoyed a healthy permanent rental market, with a diversity of permanent
rental stock offering a range of affordability and suitability.

With the uptake of tourists using online accommodation share economy platforms to book short
stays, houses and units that were traditionally offered as permanent rentals are now participating in
the tourism supply chain. Property owners are leveraging the popularity and established user base
of sites such as Airbnb, which includes the simplicity offered by these online platforms and smart
device applications. There is a growing realisation for property owners that even at an occupancy
level less than 50%, there is the potential ability to earn more from a property as a short-term rental
rather than as a permanent rental.

Historically, macroeconomics of supply and demand have kept permanent rental prices competitive
and steady. With the reduction of supply, the economics have shifted, resulting in upward pressure
on permanent rental prices, compounded by an increasing lack of permanent rental supply.

The indirect effects of rising permanent rental prices and lack of supply are varied and numerous:
     Displacement of individuals and families in lower socio-economic categories, potentially leading
      to a rise in the number of homeless and seriously disadvantaged in the shire.
     Lack of housing for lower income producing families and individuals (i.e. those working in the
      retail and hospitality industries) leading those individuals to leave the region and seek
      employment elsewhere, reducing the number of prospective employees in these industries.
     Flow on issues for the shires retail and hospitality sectors, with a lower regional worker base
      potentially necessitating an increase in wage and benefits, pushing up the prices of retail and
      accommodation at the consumer end of the supply chain.

At a broader level, these effects could potentially compromise the effective delivery of Council’s
Local Economic Plan and interrupt key goals to diversify the region’s economy, particularly if a lack
of affordable housing (through ownership or permanent rental) changes the nature of the available
worker base.




Short Term Accommodation - Online Platform Response Issues Paper                               Page 16