Is home-sharing site Airbnb to blame for Sydney’s rising rental costs? It seems like a simple-enough question, but the answer is a little more complicated.
Airbnb allows users to list and rent out entire properties or a select number of rooms on a short-term basis, usually as a cheaper alternative to a hotel for anyone on holiday. In many instances, short-term Airbnb listings will be more profitable than if a house or room were rented out to long-term tenants.
Some older Australians are taking full advantage of the ability to rent out empty rooms and boost their retirement funds. Lynne Segal, interviewed for The Sydney Morning Herald, rents out two rooms for $70 and $80 a night, with the income allowing her to remain in her Newtown home.
“Half of my neighbours are doing it,” Segal says in the article. “Everyone’s very tolerant of it.”
But there have been growing concerns about whether Airbnb is making rental prices unaffordable, especially in a booming property market like Sydney.
Based on data from University of Sydney’s Urban Housing Lab, approximately 28 per cent of Sydney Airbnb listings were for entire houses, whereas 70 per cent were for smaller areas, such as rooms or shared rooms.
“This equates to around 6,000 homes taken out of the permanent rental market,” Professor Nicole Gurran says.
While this figure indicates that droves of Sydney home-owners are eschewing long-term rentals, an Airbnb spokesperson quoted in The Sydney Morning Herald states that those whole-house listings are, realistically, only available for 30 nights a year.
So it seems that, rather than renting out their houses year-round on Airbnb, people are choosing to get some extra cash and keep their property occupied while away on an annual four-week holiday.
The Airbnb spokesperson also points out that Sydney rental costs were soaring long before the home-share website appeared on the scene.
“In Sydney, which has the most listings of any Australian city and double the number of listings of Melbourne, our community still only represents a tiny fraction – around one per cent – of the local market,” the spokesperson says.
However small the percentage of the Sydney market affected by short-term holiday letting, it’s likely that New South Wales will see some reform in the coming months; an Options Paper was released in July as part of a three-month consultation process to “implement a whole of Government framework, addressing land use and planning concerns, strata managed buildings and the amenity of existing residents”.