Short term landlords are making huge profits in 13 key local councils across Australia, with median rents reaching an astonishing $131,000 – surpassing the majority of Australian wages. A recent study conducted by Grounded Community Land Trust Advocacy revealed that the Whitsundays had the highest short term rental gross median rent, with a net rent of $85,475. This trend was also observed in other popular tourist destinations such as Noosa Heads, Hepburn Shire, Mornington Peninsula, Byron Bay, Fremantle, Victor Harbor, Hobart, Coolum Beach, Port Douglas, Warburton, and Apollo Bay, where short term landlords were charging 80.9% more than long term rentals.
The study highlighted that around a quarter of housing supply in the Whitsundays was dedicated solely to short term rentals, totaling about 1,000 homes. This shift towards higher Airbnb profits is expected to grow significantly, impacting long term renters in more suburbs as property owners prioritize short term rentals over traditional leasing options. Karl Fitzgerald, the managing director and economist at Grounded, emphasized that as returns increase for Airbnb investors, local residents face challenges in finding stable and affordable housing.
The analysis of 11,935 short term rental properties across 12 suburbs revealed a gross median rent of $66,900 and a net rent of $43,485, with Airbnb-type accommodations constituting approximately 34.6% of homes. Noosa Heads and Byron Bay followed closely behind the Whitsundays in terms of median short term rents, with figures of $123,800 and $111,000 respectively. In Hepburn Shire and Apollo Bay, owners were earning a gross median of $64,400 and $55,700, with net rents of $41,865 and $36,205, respectively.
Concerns were raised about the impact of short term rentals on the housing market, particularly in areas like Mornington Peninsula, Warburton, Coolum Beach, Mooloolaba, Port Douglas-Craiglie, Victor Harbor, Fremantle, and Hobart. The study warned that the overwhelming focus on short term rentals in tourism areas was exacerbating pressure on the long term rental market, with the equivalent of 74% of new housing supply being directed towards short term rentals.
To address this issue, the study proposed a cap and trade system to regulate the growth of short term rentals by capping the number of Airbnb properties and gradually reducing licenses over time. This approach aims to shift supply back to the traditional housing market, providing relief to local communities struggling with housing affordability. The implementation of such a system could potentially generate significant revenue while ensuring a more balanced housing market for both short term and long term renters.
In conclusion, the surge in short term rentals in key local councils is posing a significant challenge to housing affordability and availability for long term residents. It is essential for policymakers to consider innovative solutions like the cap and trade system to address the imbalance in the housing market and ensure sustainable housing options for all residents.
