The number of NSW properties placed on platforms such as Airbnb has hit 50,000 as the state’s housing minister considers major changes to the rules governing short-term rental accommodation in a bid to fix the state’s housing crisis.
Measures under consideration include slapping a levy on holiday homes on the short-term rental market and placing a cap on the number of days properties may be let out for.
Regional property owners have bristled at the prospect of a tax or levy, saying properties rented out to tourists were often not suitable for long-term rental accommodation. An industry group representing the short-term accommodation sector says capping the number of days a property can be let out has failed to boost the supply of housing.
Data obtained by the Herald shows the number of short-term accommodations on the state’s official register increased by 10 per cent in a year to 50,079.
The highest number of homes available to be rented out is in the Shoalhaven, which has 3219 non-hosted properties. The Central Coast Council had 2172, the City of Sydney had 2003 and the Northern Beaches Council had 1786.
NSW Housing Minister Rose Jackson said all options were on the table to confront the housing crisis.
NSW Housing Minister Rose Jackson says every part of the housing market is under the microscope to encourage a greater supply of long-term rental accommodation.Credit: Dominic Lorrimer
“Every part of the housing market is under the microscope for options to encourage a greater supply of long-term rental accommodation,” Jackson said.
“Whilst the review and potential reform of [short-term rental accommodation] alone is not a silver bullet, it is an important step towards fixing existing structural issues in the housing market.
“We’re not pre-empting the outcome, but some of the areas being considered are day caps, a potential levy that will lead to more investment into social and affordable housing and reporting requirements to help bolster transparency and future planning.”
Victoria will implement a 7.5 per cent levy on short-term stays from the start of next year while Western Australia will give eligible owners of short-term rental accommodation a lump sum of $10,000 if they offer their home as a long-term rental before November.
A discussion paper on short- and long-term rental accommodation released by the NSW Department of Planning earlier this year said a broad tax would encourage owners to put short-term rental accommodation apartments into the long-term market.
Peter Mortimer says the revenue from short stays is vital for his winery to survive.Credit: Monique Lovick
The Australian Short-Term Rental Accommodation Association (ASTRA) lobby group met MPs in NSW parliament this week to argue against the introduction of day caps on rental properties.
The group has instead proposed a 2 per cent levy on all accommodation types including hotels, motels and caravan parks to fund social housing including homelessness and emergency accommodation, support regional tourism as well as skills education opportunities at TAFE. It opposes any limits on how often property can be let out for.
NSW was the first state to regulate Airbnb-style letting in 2018 when it mandated a cap of 180 days for investment properties in greater Sydney.
“We would ask the government to go back to the drawing board and remove caps where they exist,” the association’s chief executive Mitchell Price said.
He noted the 50,000 properties on the NSW register included those which were rented out for a single night or day in an entire year, meaning they could not be used for long-term rentals.
Airbnb supports a short-term rental levy charged to the guest at the time of booking, of between 3 and 5 per cent along with the removal of night caps, which they say have little to no impact on increasing the availability of long-term housing stock.
Byron Bay was last year given the green light to cap short-term rental stays to 60 nights a year– a change set to come into effect in September.
Since the rise of Airbnb over the past decade, overnight visitors to regional NSW have increased by 40 per cent to 27 million in 2023.
Peter Mortimer, who joined the ASTRA delegation to parliament this week, said the short-term property he lets out on his winery in Orange was not suitable for the long-term rentals and was vital to attracting visitors.
“The revenue we get from short stays is vital for us to survive,” he said.
He charges between $200 and $300 a night but said bookings were down 39 per cent since last year because of the financial strain.
“You add another tax on that, people will choose not to come,” he said.
Any decision on new rules governing the short-term rental market will not be in the upcoming NSW state budget, and a final decision is expected to be reached in the coming months.
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correction
An earlier version of this story said a 60-day cap on short-term rental accommodation was already in place in Byron Bay. The new rules will be in force from September.