A raft of policy changes must be introduced to save our coastal towns from the rising tide of short-term holiday letting, a new report has found.
The report, undertaken by Sydney University’s School of Architecture, Design and Planning, confirmed that short-term holiday rental (STHR) platforms have strengthened rather than weakened their hold in our coastal towns in recent years.
This was demonstrated by the fact that short-term rentals were increasing as a proportion of the housing stock in these towns.
18% of housing is STHR
Byron had a massively higher proportion of short-term rentals than any other coastal town or city, with just under 18 per cent of housing in the Shire being used for this purpose as of December last year.
Its nearest rival in the holiday letting stakes were Busselton, south of Perth with 8.8 per cent, and the Bass Coast in Victoria with 7.8 per cent.
The report, commissioned by the Australian Coastal Councils Association, recommends that state governments strengthen support for local councils by requiring digital platforms like Airbnb to share data on listings and bookings so councils can better track compliance and assess housing impacts.
‘There is a need for stronger renter protections, greater investment in affordable housing in regional areas, and the reinvestment of any short-term rental levies back into the communities most affected,’ the report’s lead author Professor Nicole Gurran said.
There is also a strong recommendation in the report to use short-term rentals as emergency housing in certain situations, and to monitor the effects of new taxes to prevent further losses of permanent rentals.
Supporting owners in transitioning properties back to long-term rental markets is also emphasised.
‘The existing frameworks in these towns need ongoing support from state governments and booking platforms,’ Professor Gurran said.
Holiday letting cap not delivering
In the Byron Shire, a 60-day cap on non-hosted short-term rental accommodation came into effect on September 23, 2024.
This means properties not occupied by the owner are limited to being rented out for holiday letting for a maximum of 60 days per year.
While the year-long implementation period for the cap means that it is too early to fully determine its effectiveness, recent research has cast doubt on the effectiveness of such measures.
In particular, a University of Queensland (UQ) study released at the end of June found that the initial 180-day cap on short-term holiday rentals in regional New South Wales had no impact on the housing crisis there.
Researchers from UQ’s School of the Environment and School of Economics analysed the NSW government-imposed 180-day cap on short-stay providers in Byron Bay, Ballina, the Clarence Valley, and Muswellbrook from late 2021, and whether it resulted in fewer holiday listings and a subsequent drop in price of long-term rentals.
Data was analysed between 2019-2023, taking in COVID-19 lockdowns, the announcement and implementation of regulations, and the post-pandemic reopening.
Researcher Professor Alicia Rambaldi said the study applied advanced modelling techniques and found there was only a temporary reduction in short-term rentals.
‘We found no significant rent level decrease,’ she said.
Fellow researcher Dr Frank Zou said the analysis identified a temporary 22 per cent drop in listings in the Byron Shire soon after the 180-day cap implementation, but the numbers soon recovered.
‘The 180-day caps in these specific NSW communities do not appear to have had the intended effect of promoting long-term rental affordability,’ he said.
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