NSW rules limiting owners from renting out properties on a short-term basis on platforms such as Airbnb to 180 nights a year have not been enforced once in nearly two years of operation, records show.
The 180-day cap for non-hosted short-term rentals was introduced by the state’s then-Coalition government in November 2021 as part of efforts to make rents more affordable. It applies to Sydney and local government areas including Newcastle, Ballina, the Bega Valley, and parts of the Clarence Valley.
Local council mayors say the short-term rental market is worsening the housing supply crisis. Jason South
But the NSW Office of Fair Trading, which was tasked with enforcing the limit if a complaint is lodged via a local council, has not issued any penalties. Since the cap came into effect, Fair Trading has received over 550 complaints, but none resulted in a penalty.
Some local council officials say the cap has failed to do anything to ease the rental housing crisis due to being too lenient, and urged the new Labor government of Premier Chris Minns to act.
“The 180-day cap is a farce,” Byron Shire Mayor Michael Lyon told AFR Weekend. “It does nothing and it was designed to do nothing. It was designed to throw a bone to those people that were complaining about the lack of residential housing.”
Sydney lord mayor Clover Moore said the cap was too long, and Fair Trading’s short-term rental register was “incomplete, inaccurate and not of a sufficient standard”, making it difficult for councils to take action.
Australia’s Airbnb regulations are lenient compared to overseas counterparts. Outside of NSW, Melbourne and Canberra do not charge short-stay operators, but both have said they were aware of community concerns on housing availability and affordability.
By comparison, cities such as Amsterdam, Toronto and Boston impose tourist taxes on short-term rentals, while San Francisco and London have placed an annual 30 to 90-night cap on short-stay rentals.
NSW Minister for Fair Trading and Better Regulation Anoulack Chanthivong admitted the 180-day cap had not been effective. Mr Chanthivong said he would work with local governments to make it easier for them to enforce rules against short-term rentals.
Part of the ineffectiveness of the cap was that it relied heavily on local governments reporting breaches to Fair Trading, he said.
“Fair Trading can investigate serious breaches but that relies on local governments and others reporting issues. Most breaches of the code relate to things local governments are best placed to manage and enforce, like parking violations,” Mr Chanthivong said.
Australia has fewer homes per 1000 people than the average of nations in the Organisation for Economic Co-operation and Development, with NSW at the epicentre of the housing crisis. That has helped fuel a rise 6.3 per cent in rents in the year to May, the highest level in more than a decade.
Federal Housing Minister Julie Collins has signalled support for further regulatory “interventions” in the short-term rental market but has been unwilling to endorse federal measures due to rental and tenancy reforms typically being addressed at the state and local levels.
Ms Collins declined to comment when asked about NSW’s cap not being enforced.
Mr Lyon said the Minns government was not moving quickly enough on short-term market rental reforms as it had yet to endorse the Independent Planning Commission’s advice, which recommended a 60-day cap for the Byron Shire due to the locality’s rental crisis.
In the Byron Shire, residents spend on average over 50 per cent of their income on rent, Mr Lyon said. The council also has the highest rough sleeping rate in NSW.
Murray Cox, creator rental listings data websire Inside AirBnB, said he was not surprised at the lack of enforcement by the NSW government as it was difficult to enforce annual caps. He said hosts could use different platforms or create multiple accounts on the same platform to hide their activity.
“The rental cap is not working if there have been no fines despite evidence of illegal full-time short-term rentals. It’s my understanding that the NSW government is receiving data from the platforms, so the lack of enforcement either points to lack of political will, or the will of the regulators, or both,” Mr Cox said.
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