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Is AirBnB to blame for the Australian rental crisis?

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NoosaHeads_Canva_1800x1000

While investors can now earn up to around $85,000 to AirBnB their homes in some parts of Australia, rental vacancy rates sit at half the pre-COVID level.

Amidst Australia's worsening rental crisis, property owners are earning thousands more by AirBnB-ing out their properties instead of renting.

Australia offers the second-highest in earnings from AirBnB across the world, according to AllTheRooms.

(The below dollar figures have been converted to Australian dollars from US dollars using rates as of 16/03/2023)
CountryAverage annual host earnings 2021Average annual host earnings 2020
USA$66,727$38,546
Australia$42,210$25,050
United Kingdom$33,475$18,898
Canada$29,917$17,538
Portugal$25,624$13,554
Spain$25,769$11,564
Mexico$22,290$12,515
Indonesia$18,723$11,101
France$17,235$10,454
Thailand$13,793$12,325

The average AirBnB income across Australia in 2021 was more than $42,000. Many suburbs see much higher figures: Noosa Heads reached heights of close to $85,000 a year.

CityAverage annual host earnings 2021Average annual host earnings 2020
Byron Bay$83,486$69,900
Noosa Heads$84,713$48,391
Surfers Paradise$71,872$35,150
Broadbeach$55,722$30,597
Rye$56,443$31,972

But there's an ongoing rental crisis in Australia. According to REA Group's PropTrack Market Insight Report released last week, the national rental vacancy rate in February was at half the level seen before the pandemic.

According to Tenant's Union CEO Leo Patterson Ross, AirBnBs in many areas are taking away from potential rental accommodation which would increase the level of supply so desperately needed.

He said the supply of AirBnB in contrast to rental properties was particularly having an impact in regional areas where tourism was a big factor.

"The difference in rent to holiday lettings can be really significant and there is often pressure to encourage more tourism to support local businesses. The issue is when there aren't enough homes for the community alongside the holiday accommodation and this needs to be given much more weight," he said.

No support for struggling renters

As renters face rising costs, and in some cases being priced out of their area, there remains little support.

"Unlike other essential services or even credit and debt, there is no hardship support for renters who might be struggling," Patterson Ross said.

"Several charities have limited funds that can help cover costs for people on very low incomes, but we really need a better system of support for people just facing a short term crisis."

The Tenant's Union website has a range of legal resources, toolkits and calculators like the Rent Increase Negotiation Kit, that can help people navigate and links to the network of local Tenants' Advice and Advocacy Services for direct advice and assistance.

Some solutions for the rental crisis

In combating the rental crisis, Patterson Ross said while there were a range of reforms that could help, there are three that would act across both the short and long term to significantly ease rental crisis pressures.

"Fundamentally, we need to recognise that housing is an essential service," Patterson Ross said.

"Government and industry need to ensure there is sufficient supply but also sufficient oversight and regulation to make sure that the community can access and maintain a good quality home in the areas they need.

"What this looks like is a significant increase in the supply of public and community housing to counteract both the shortfall of private construction and the affordability pressures on lower income households.

"In tenancy regulation, we need to ensure homes are stable and reliable - so removing no grounds evictions and replacing with a reasonable grounds, and looking at the allowable rate of rent increases."

Recently, the Liberal and National parties, Labor and the Greens all committed to ending no grounds evictions for renters on rolling leases, opting instead for the reasonable grounds model.

If you're worried about rising rent and the cost of living, check our cost of living hub for tips and advice.

Image: @patrickoberem via Canva.com

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