Concerns Airlie Beach headed for Venice-style rental market

Property experts examine how short term accommodation rentals could impact the housing market.

A view shows clear waters by a gondola outside Hotel Marconi (L) in Venice's Grand Canal near the Rialto Bridge (Rear) on March 18, 2020 as a result of the stoppage of motorboat traffic, following the country's lockdown within the new coronavirus crisis. (Photo by ANDREA PATTARO / AFP)

APPLICATIONS to transform properties into short term accommodation rentals has sparked questions over whether Airlie Beach is headed for a Venice-style housing market.

Residents in Venice are grappling with unaffordable rent and limited options, and the prospect of something similar happening in Airlie Beach has sparked debate.

Whitsunday Regional Council last month debated the short term accommodation issue, and the impact these properties had on the community as well as hotels in town.

Division 2 Councillor Al Grundy urged the council to develop a policy on properties used for short term letting, saying tourism destinations across the world were confronted with similar challenges.

"We're now seeing push back from the general community on the basis that affordable housing is being taken away in the name of short-term rental," he said.

Cr Grundy referred to destinations such as Venice where rental properties have been transformed into short term accommodation rentals.

As a result, residents are moving out of the city because of increased rental prices and lack of availability.

Propertyology head of market research Simon Pressley said short term accommodation could provide economic benefits to the Whitsunday region.

However, Queensland property experts say Airlie Beach is not at risk of a Venice-esque rental market and highlighted the benefits these properties can have on the local economy.

Propertyology head of research Simon Pressley said short term accommodation lettings provided more options for holiday-makers who come to the region with money to spend.

"That one house that's now available for 52 weeks of the year could potentially be 52 visitors who don't live in that town who come to that town now because they've got accommodation," he said.

"Each one of those visitors will spend a lot more time when they're in Airlie Beach than what the local resident would be spending.

"That's probably going to be hundreds and hundreds of thousands of dollars that filter through the Airlie Beach community."

Councillors raised concerns about the impact that short term accommodation rentals would have on the long term rental market.

Mr Pressley said it was often non-capital city areas, like Airlie Beach, that could reap the benefits of short-term accommodation.

Mr Pressley said a decrease in long term rentals could, hypothetically, lead to increased rental prices.

"If there were 1000 properties in Airlie Beach owned by an investor … if 300 of those thousand become part of the short-term letting pool, that's a 30 per cent reduction in the supply of rental accommodation available," he said.

"So what that would do is for those residents in Airlie Beach who do rent a house, it would put pressure on rent and increase the potential of rent increasing."

However, Mr Pressley said rent often increased from external factors and the cyclical nature of the market would mean more short-term rentals would have future benefits for the region.

More accommodation rentals could bring more people to town and potentially encourage more people to move to the Whitsundays, meaning there were "a heck of a lot more positives than negatives" in increasing short term accommodation in the Whitsundays, Mr Pressley said.

Real Estate Institute of Queensland CEO Antonia Mercorella said it was important to strike a balance between short and long term rentals. Picture: Richard Walker

The Real Estate Institute of Queensland CEO Antonia Mercorella agreed, saying holiday rental properties strengthened Queensland's position as a tourism destination.

However, Ms Mercorella said it was important to strike a balance between short and long term rentals and development would be key in ensuring this.

"We live in the sunshine state and tourism is also very important to our economy and there are many Queenslanders who run businesses that rely on tourism, so striking the right balance is important," she said.

"Queensland's rental population is on the rise and the housing supply needs to keep pace with rental demand."

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An increase in house prices, a desire for greater flexibility and the impacts of coronavirus driving people from cities to rural areas were among many reasons for the rise in rental demand, she said.

However, Ms Ms Mercorella said if the balance between short and long term rentals was struck, the region could continue to grow without the threat of large increases in rental costs.

"While at some level it's wonderful that people want to come and live in our great state and there will be benefits to our economy, it's really important that we do have adequate housing … and that we still have accommodation options for tourists," she said.

"Undoubtedly it's a challenging balance act.

"I don't think we're at a critical stage here in Queensland."

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