Rental prices in many parts of Australia are growing 10% or even 20% year on year, leaving people in parts of the country struggling to find housing, especially in regions hit by natural disasters.
This has in turn led to questions over the almost 1m dwellings vacant on census night around Australia, and the role of short-term rentals in driving up rents, such as those leased on platforms like Airbnb.
Here, we take a look at where the highest concentration of Airbnb properties are, where rents have spiked the most, and which areas had the highest amount of vacant properties on census night, and if any of these three are correlated.
Broadly speaking, experts say there are a number of factors that could be affecting short-term rental, rent prices and empty properties.
“There is of course concern with rents going up at the moment, but the evidence shows there’s a bunch of reasons for that. Housing construction during the pandemic did not keep up with demand,” says Dr Thomas Sigler, an urban and economic geographer from the University of Queensland.
Other reasons for growth in short-term rentals and the price of longer term rentals could include changing household dynamics, migration away from inner cities, increased remote work, and the increasing “professionalisation” of the short-term rental industry. Some regions with significant price rises have also seen serial disasters such as floods and fires affecting the housing stock.
“There is an increasing premium on place and space because people aren’t travelling,” Sigler says. “So yes we want that extra bedroom so I can have a Zoom room. There’s a lot of reasons people want more space.”
A Guardian Australia analysis of Airbnb locations and rental prices for each postcode showed no overall correlation between rent increases and Airbnb density, with only a few areas overlapping with both high Airbnb density and high rental increases.
Most of the areas where there is both a high share of Airbnbs and huge recent rental increases are what Sigler calls “super tourism” areas – such as Byron Bay. About 30% of Byron’s dwellings are listed on Airbnb – depending on how you count.
But if you look at postcodes surrounding Byron the numbers of short-term rentals drop significantly, even in ones that have seen bigger increases in long-term rental prices.
Most tourism areas have about 5%-10% of their dwellings for short-term rentals, and it’s closer to 1%-2% in metropolitan Sydney and Melbourne, which are also seeing huge increases in longer term rental prices.
Port Fairy along the Great Ocean Road in Victoria also has a relatively high density of Airbnbs and large year-on-year increases in rent. But most areas that are high on one measure aren’t high on the other.
Many of the areas with a lot of short-term rentals also had a large percentage of empty homes on census night 2021. This makes sense given a lot of the dwellings vacant on census night are likely holiday homes, and the census was taken when various states were restricting travel.
Of the more than 1m dwellings that were unoccupied on census night, Sigler and his colleagues estimate that about 850,000 are “regularly unoccupied”, which includes things like churn between sales and rents, holiday homes and owners being overseas.
Sigler and his colleagues have also looked at the number of vacant dwellings in previous census and found similar numbers to the 2021 census – there were more than 540,000 vacant dwellings in the 1986 census (about 10% of total dwellings), for example. A total of 130,000 of these were holiday homes – they stopped asking this question on subsequent census.
There has also been significant changes in the composition of the short-term rental market over the past few years. The number of short-term rentals boomed between 2016 and 2019 – coinciding with a glut of apartments coming on the market – peaking at more than 300,000 properties. But this has since dropped to the “low 200,000s”, Sigler says.
Data on monthly available listings on Airbnb shows a drop from more than 150,000 listings in December 2019 to about 130,000 in recent months. But this isn’t uniform across the country. While parts of metropolitan Sydney and Melbourne have seen declines of about 50%, regional areas have seen huge increases.
Many of the growth areas are “tree change” locations – within 100km or so of a major metropolitan area. One reason for this could be because customers for short-term rentals aren’t just tourists. Many are local residents that need a short stay, or even out-of-towners that are looking to stay for many months.
Sigler says this is another complication in attempting to link short-term rentals and the price of longer term rentals.
“A lot of people staying in those Airbnbs are nurses or construction workers and people who are working [locally] who would otherwise have a lease or be in a flatmate situation. It’s not a one for one substitution. It’s not like every dwelling you take off the [short-term] market adds one to the long-term rental market.
“We looked at this question in 2018, we explored whether there is a spatial correlation between rent increases and Airbnbs and we found no evidence.
“We tried really hard to find some evidence of this and we couldn’t.”
Notes and methods:
Percentage of dwellings that are Airbnbs based on Inside Airbnb data from June and July 2022.
Properties matched to postcodes using the latitude and longitude of the properties.
Share of vacant properties by postcode calculated by dividing vacant dwellings by total private dwellings.
