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When Victorian Premier Daniel Andrews this week put a levy on Airbnb properties to encourage more of those properties to become long-term rentals, the fury was palpable.
Leanne Taylor, who has three investment properties rented out on Airbnb, told The Australian Financial Review that it was going to be tough for her. After all, she explained, she was a single mum and was grappling with rising energy and grocery bills and mortgage interest rates.
Taylor said the 7.5 per cent levy on short-term rental accommodation such as Airbnb means her income stream would take even more of a hit. “I’m not rich. If I was rich, I wouldn’t have to rent my properties out,” she explained.
Others might argue if you have three investment properties you’re doing better than most. And it’s likely that the cost of the 7.5 per cent levy will be passed on to Airbnb’s Melbourne customers, one way or another.
In the five years to 2023, the number of Airbnb listings in Melbourne fell from 24,094 to 20,078, according to AirDNA, a data firm not affiliated with Airbnb.
This decline might have supported Taylor’s case about the unfairness of the levy, if it weren’t for the occupancy figures of such rentals, in both Melbourne and Sydney, which is why they have been in the state governments crosshairs.
It’s no surprise that the highest occupancy rates of Melbourne Airbnb’s listings occur in summer. Last January, the occupancy rate of Melbourne’s Airbnb rentals hit 67 per cent. But for the rest of the year they hover between 50-60 per cent, ignoring the anomaly of the pandemic, which means for a big proportion of the year those properties sit empty.
AirDNA says the average daily amount charged by a Melbourne Airbnb host grew 25 per cent over the past five years to $258.96.
For Sydney, the Airbnb story is slightly different. In the five years to 2023, the number of Airbnb listings fell dramatically from 30,936 to 12,305.
In 2018-19, the NSW government imposed laws that restrict short-stay rentals, whether booked through Airbnb, Expedia, Booking.com or other platforms, to a maximum of 180 days annually in Sydney.
The peak occupancy rate for Sydney Airbnb rentals over the past five years, was in February this year, hitting 73 per cent.
However, like Melbourne, the occupancy rates for the rest of the year typically hover between 50-60 per cent. This year, the occupancy rates have stayed above 60 per cent, which reflects the decline in properties available and the return of tourists since the pandemic.
In the past five years, the average daily amount charged by a Sydney Airbnb host grew 31 per cent to $296.11, which includes those hefty cleaning fees that irk most guests.
A year or two ago, social media was full of stories of the outrageous requests some Airbnb hosts made of guests to clean properties, while still charging big cleaning fees. These included requests from stripping beds and putting the dirty linen and towels into the washing machine to vacuuming and mopping the floors.
Now, social media is full of stories of how Airbnb has contributed to the housing affordability crisis, and that they have created a whole new class of homeowner – the short-term rental speculator.
The groundswell of anger against companies such as Airbnb and Vrbo, from New York, London, Amsterdam, to Melbourne and Sydney, has only intensified as the housing shortage and affordability crisis worldwide has worsened. As a result, more and more cities around the world have regulated short-term holiday stays, with some of the harshest being changes made in New York this month.
But Airbnb and similar companies are an easy target, and not the main cause of the housing crisis. It’s been a failure of government policy decisions over the past two decades that have exacerbated the housing shortage, not just in Australia, but other nations as well.
The Victorian government has taken steps towards addressing the housing crisis by announcing an ambitious target of 800,000 new homes over the next decade, including the promise of faster and more centralised planning decisions. In NSW, the government instead focused on infrastructure development as a way of spurring on more apartment and house development.
Meanwhile, the federal government touted a $10 billion Housing Australia Future Fund, an investment fund from which the returns will be spent on the development of social and affordable housing.
The sacred cows of negative gearing and capital gains tax discounts on investment properties remain untouched, as does the tightening on limits of foreign ownership of properties. If any of those were reformed they would make a difference to housing affordability.
For now, it’s softer targets such as the promise to accelerate housing development and Airbnb owners.
Many of us have enjoyed the benefits of good and bad Airbnbs, and wouldn’t want the service to disappear altogether. And yet, it’s hard to have sympathy for those complaining of a 7.5 per cent impost, when there are queues most weekends of people desperately trying to find long-term rentals across Australia.
Those lucky enough to secure such rentals are paying eye-watering amounts, and for some renters in the 20s or 30s, there is no option but to move back in with Mum and Dad.
Leanne Taylor at least has a few properties to house her kids when they’re grown up. That is, when she’s not renting them on Airbnb.
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