Report claims 3000 unregistered short-stay rentals in Sydney council area

A report has found that 3,000 unregistered short-term rentals go unnoticed in the Sydney metropolitan area.

City councils, regional councils with high tourist numbers and state governments have been trying for years to tackle short-term rentals and thus alleviate the housing crisis. However, various regulations and programs are only now bearing fruit.

The New South Wales government requires properties to be registered on short-term accommodation platforms, but a study commissioned by the City of Sydney found that only 2,500 out of 5,500 listings are registered.

In a short-term rental, the home, which could serve as a family home, is empty for at least parts of the year, as temporary short-term stays usually bring the owner a better return than accommodating a tenant.

Brisbane City Council has just introduced a short-term rental licensing system, and a 7.5 percent Victorian State Government levy on short-term rental platforms will come into effect on January 1, 2025.

But Airbnb and the Australian and New Zealand Short Term Rental Association have questioned the Sydney data.

“It is disappointing that the City of Sydney is using data collected from third parties,” said Michael Crosby, Head of Public Policy at Airbnb Australia.

“Relying on potentially flawed data can lead to misguided policy decisions that fail to take into account the true state of the short-term rental market.

“Overestimating the number of rentals could lead to unnecessary regulations, while underestimating could lead to inadequate oversight.”

The NSW Department of Planning, Housing and Infrastructure cannot confirm the figures for unregistered short-term rental accommodation.

Registration costs $65 up front plus $25 annually and makes the property eligible for the state’s 180-day short-stay restriction.

The mayor of Sydney is calling for the cap to be lowered.

“One hundred and eighty days is simply too long. Investors make more money renting out their properties for short periods of time, so there is no incentive to offer these properties on the long-term rental market,” said Mayor Clover Moore.

The mayor wants to further restrict short-term rentals of non-primary residential properties by owners and halve the 180-day limit.

“Our concern is not with properties where someone occasionally rents out their guest room, or properties that are rented out while the resident is on vacation,” Ms Moore said.

“A balanced approach is needed that distinguishes between occasional short-term rentals and commercial tourist accommodation in order to enable short-term rentals under conditions that do not adversely affect the supply of rental accommodation.”

The New South Wales Government is conducting a comprehensive review of short-term rentals.

“We are determined to do everything in our power to tackle the housing crisis and look closely at every part of the housing market to find options that encourage a greater supply of long-term rental homes,” Housing Minister Rose Jackson said earlier this year.

“This review will influence our approach to making better use of all forms of housing, including short-term lets, vacant properties and holiday homes.”

Brisbane City Council announced a permitting process this week. To be included on the list, a property must have planning permission, the backing of a body corporate and a 24/7 property manager.

In Brisbane, short-term rental prices were already increasing, and the new program is driving them up even further.

“They are not using the house for normal residential purposes, but effectively for business purposes,” said Mayor Adrian Schrinner.

“And so we linked the tariffs to more commercial tariffs.”

Western Australia has enough money to tackle the problem. The Western Australian government last year announced a registry, new building permit rules for properties in the greater Perth area and a $10,000 incentive to get a property back on the long-term rental market.

To receive the $10,000, the applicant must offer the new tenant a 12-month lease. Rents are capped depending on the region.

Introducing the program, Trade Minister Sue Ellery said the number of short-term rentals worldwide was unclear.

Two of the largest short-term rental platforms, Stayz and Airbnb, generally support registers as they provide more clarity and data, but opposed limiting the total number of nights allowed per year.

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