Abundance of short-term rentals partially to blame for market stress, expert warns

Leaders in the property space are urging landlords to consider switching their short-term rental to long-term in a bid to ease the state’s rental crisis.

A leading real estate agent believes an oversupply of short-term rentals is partially to blame for the country’s rental crisis, arguing the influx in unoccupied homes is driving up rent and decreasing the number of long-term rentals available.

Marcel Dybner, partner and head of property management at Besser+Co, has experienced first-hand how a surge in demand for properties and low vacancy rates are affecting Australia’s rental market.

The property expert of 15 years said it was only last February his company was struggling to lease 140 properties in Melbourne because the interest wasn’t there.

A year on, the tables have turned, with Besser+Co currently listing 30 properties for lease – most of which have pending applications from interested tenants.

“We’re getting 20 times as many people through some properties as we normally would,” Mr Dybner told news.com.au.

“We’re currently leasing properties within days of listing them. It’s unprecedented.”

A leading property expert has opened up about how an abundance of short-term rentals are partially impacting the rental market. Picture: Supplied

And with more international students and young adults looking to get into Australia’s rental market, the property manager anticipates the vacancy rate – which nationwide currently sits at one per cent – to drop.

“We’re inundated at the moment with strong applications for nearly every rental property we advertise and unfortunately we are having to turn away a large number of really good applicants because we just don’t have enough properties available for them,” he said.

Consequently, Mr Dybner is calling on short-term lease landlords to consider entering their home into the long-term market during off-peak holiday seasons, in a bid to ease the pressures on the rental market.

“Short term rentals and Airbnb are adding to the pressure by removing housing options from long term tenants,” he said.

“For every property advertised on Airbnb, that’s one less property available for someone to move into as a long term rental.”

Melbourne’s inner-city suburbs have become a hotspot for prospective renters, however a quick search on Airbnb’s website revealed hundreds of apartments and condos remained vacant over the weekend.

And with the peak holiday season drawing to a close, Mr Dybner said there’s now “an oversupply of short term accommodation”.

An abundance of short-term properties are not only raising the cost of rents but are costing landlords hundreds by sitting vacant. Picture: news.com.au

However short-term rental sites like Airbnb say this isn’t the case, alluding to the fact one million homes were empty on census night which it says far exceeds the number of short term rentals listed in Australia.

“Short-term rentals also provide a way for everyday people to stay afloat and combat rising costs of living and growing mortgage repayments,” Airbnb country manager for Australia and New Zealand Susan Wheeldon said.

“It’s no surprise that we’re seeing many people rely on hosting to make ends meet in the face of the current economic climate.”

Mr Dybner acknowledged the repercussions of the pandemic drove landlords towards short-term renting as many had to lower rents due to their tenants not being able to afford the current rate.

Additionally, the real estate partner said longer vacancy periods drew landlords to leasing their properties short-term as they were likely to earn more.

“These factors all put a lot of pressure on landlords, so some started looking at other options,” he said.

But with Melbourne experiencing its lowest vacancy in years at a rate of 1.2 per cent, Mr Dybner is calling on prospective landlords to reverse the trend.

It comes as the Victorian Greens proposed a number of short-stay regulations on Monday, in a bid to alleviate the state’s rental crisis.

Under the party’s proposal, a 90 day cap on how many nights a year a landlord could lease a short-term rental would be introduced.

Additionally, new rules would come into effect to allow owner corporations to regulate short-stays for properties that are not at a host’s principal residence and a mandatory public register of short-stay operators would be introduced.

“Short stay accommodation is almost entirely unregulated in Victoria, and it’s making the rental crisis worse,” Victorian Greens spokesperson for renters’ rights Gabrielle de Vietri said.

“Investment properties are being turned into mini hotels at the cost of a family or worker having access to secure rental properties.”

Victorian Greens spokesperson for renters’ rights Gabrielle de Vietri is calling on Daniel Andrews to introduce regulations on short-term rentals. Picture NCA NewsWire / Ian Currie

The Greens said there are currently 1200 properties available for short stays in the Melbourne local government area (LGA) of the City of Yarra.

Meanwhile, there are less than 300 properties available for rent in the area.

“We need to introduce strong short-stay regulations to ensure affordable housing is available to families and workers experiencing housing stress,” Ms de Vietri said

“Cities around the world like New York, London, and Berlin regulate their short-stay market, it’s time for us to do the same.”

Even if regulations don’t come into effect, Mr Dybner has faith more investors will return to the long-term rental space, noting some have already started to transition back now the holiday season is over.

“We’ve had a lot of clients come back to us after trying Airbnb because the long term rental market is proving to offer better returns,” Mr Dybner said.

“I believe the strong rental market will get a lot more investors back into the property market, increasing the supply for renters.”

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