Researchers call for data sharing, levies and supply protections as short-term rental pile pressure on rent, house prices
New research from the Australian Housing and Urban Research Institute (AHURI) has outlined the regulatory conditions needed to manage Australia's short-term rental accommodation (STRA) sector, as listings surpass 174,000 and long-term rental vacancies continue to fall.
The study, conducted by academics from the University of Sydney, the University of New South Wales and University College Dublin, found that effective regulation must begin with a clear understanding of the sector's size, composition, market impacts and provider motivations. It draws on national listing data, geographic analysis and interviews with operators and stakeholders.
According to AHURI, Australia's STRA sector grew by more than 10% between December 2022 and December 2024, reaching 174,558 listings. Approximately 84% were whole-property rentals, with un-hosted properties recording the strongest growth. The sector is also highly concentrated: in December 2023, just 18,187 entities controlled 98,384 of Australia's 171,416 Airbnb listings.
The research confirmed that high concentrations of STRA place upward pressure on rents and house prices. In high-tourist areas, displacement of long-term rental stock was acute.
"In December 2024 in Hobart, STRA whole-property listings outnumbered long-term rental vacancies 36 to one, while Shoalhaven on NSW's South Coast had over 25 STRA whole-properties for every rental vacancy," said professor Nicole Gurran (pictured right) of the University of Sydney.
Interviews with operators revealed that financial returns were not the only factor driving participation. "Metropolitan owners were more likely chasing returns, while many regional providers wanted to offset costs of a second property, or sought non-financial benefits like property maintenance, while still being able to access the home for their own use," Gurran said.
"Understanding motives is important for policy setting, as restricting STRA may not be sufficient to convert holiday homes into long-term rentals."
Client demographics varied by location. Coastal properties served predominantly tourists, while urban-fringe listings housed students, project workers, hospital visitors and relocators. The study also identified a role for STRA in emergency housing following natural disasters.
"STRA was also used as emergency accommodation, with demand spiking after natural disasters — suggesting a flexible short-term rental sector could offer social and economic benefits beyond tourism," Gurran said. "However, we currently lack systems for local service providers to easily access STRA in an efficient and consistent way when disaster strikes."
The research showed that Australia has moved more slowly than Europe and North America in regulating STRA platforms. Recent measures in Western Australia, Victoria, Tasmania and New South Wales have produced mixed results. In Hobart, a permit system, mandatory platform reporting and conversion incentives have not prevented losses of long-term rental stock. In metropolitan New South Wales, a 180-night cap on un-hosted STRA and registration requirements have not resolved tensions between the two rental sectors.
The researchers identified five elements of effective regulation: compelling platforms to share timely and reliable data; enforcing existing rules through platform reporting and well-resourced compliance mechanisms; protecting long-term rental supply by restricting conversions or directing levy revenues to affordable housing; allowing unrestricted short-term rental accommodation in designated tourism zones; and applying taxes or levies equally across all accommodation providers to discourage STRA relative to long-term rentals.
Responsibility for reform spans all levels of government. "The Federal Government can reduce rental market impacts of STRA through national housing policy, taxation and housing assistance," Gurran said.
"State and territory governments can support STRA registration, land use regulations and renter protections, while enabling local governments to respond to specific community and market impacts."
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