Short term landlords are raking in super profits in 13 key local councils, with median rent hitting a shock high of $131k – more than the majority of Aussie wages.
New independent research by Australian-based Grounded Community Land Trust Advocacy found that was the short term rental gross median rent in the Whitsundays – with net rent coming to $85,475 – the highest of 13 key tourism suburbs it analysed.
It found short term landlords were earning super profits across Noosa Heads, Hepburn Shire, Mornington Peninsula, Byron Bay, Fremantle, Victor Harbor, Hobart, Coolum Beach, Port Douglas, the Whitsundays, Warburton, and Apollo Bay, charging 80.9 per cent more than long term rentals there.
An Airbnb house in Sydney: New research is warning that massive profits will drive out local renters as more owners move to Airbnb and other short term rentals. Picture: Tim Hunter.
This entire four bedroom home in the Whitsundays can be rented for $799 a night. Picture: Airbnb
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Around a quarter of housing supply in the Whitsundays was purely short term rental, about 1,000 homes already, with the study warning those numbers will grow dramatically, impacting long term renters across more suburbs as owners shift to higher Airbnb profits.
Grounded managing director and economist Karl Fitzgerald said “as returns rise for Airbnb investors, local residents struggle to find stable and affordable housing”.
“Any investor aware of the significantly higher return is bound to prioritise the STR market,” the study warned. “Such a disparity may be playing a role in the exit of investors from the LTR market.”
Warburton in Victoria is among the hardest hit for local renters given the surge in short term rentals. Picture: Supplied.
The study analysed 11,935 short term rental properties across 12 suburbs finding a gross median rent of $66,900 and net rent of $43,485, with Airbnb type accommodation about 34.6 per cent of homes.
Noosa Heads logged the second highest median short term rent at $123,800 ($80,470 net) and Byron Bay was $111,000 gross ($72,150 net).
Over 1,000 owners in Hepburn Shire were raking in a gross median of $64,400 off their Airbnbs, netting $41,865, in Apollo Bay 409 owners the numbers were $55,700 gross and net of $36,205. Airbnbs in both councils outnumber long term rentals.
In Mornington Peninsula, there were 4,040 properties with gross rent at $82,800, netting $53,820. Warburton owners were bringing in $42,200 with a net rent of $27,430 with major concerns over its growth overtaking housing for resident rents.
Coolum Beach owners were seeing median rent of $66,900, net of $43,485, with nearby Mooloolaba grossing $69,200 with a net of $44,980 while Port Douglas-Craiglie was higher at $79,400 with net rent at $51,610.
In Victor Harbor there were 419 properties grossing $49,600 with net rent at $32,240, Fremantle $54,700 and $35,555 respecitively and Hobart $55,500 and $36,075.
This one bedroom cabin in Red Hill South in Mornington Peninsula can be rented at $331.40 a night. Picture: Airbnb.
“Locals can expect future rental supply to head towards the higher returns in STR. This crimps both affordable rentals and the potential for that housing supply to trickle down to first home buyers.”
Mr Fitzgerald warned that within tourism areas, new housing supply was now “overwhelmingly directed towards the STR market, which is amplifying pressure on the LTR market”.
They estimate the equivalent of 74 per cent of new housing supply in those areas was heading towards short term rentals.
“Who would have thought a new investor cohort would make a traditional landlord look like an angel?”
Research from Grounded Community Land Trust Advocacy looked at short term versus long term incomes in 13 suburbs, with most double what local residents pay. Picture: Supplied.
This one bedroom penthouse unit is available for rent at $521.80 a night. Picture: Airbnb
“As housing supply is the mecca of Federal and state affordability policy, our decision makers must take note that the equivalent of 74.2 per cent of new housing supply was consumed by STRs. Much was taken from existing supply, with the net affect that barely 25 per cent of new supply was making a difference.”
It warned that over the decade to 2021, for every 112 homes produced, 83 went to Airbnb and other short term rental options.
In Warburton, Victoria, short term rental supply grew nearly 10 times the locality’s total housing supply rate, the study said, with long term rental supply falling 36 per cent over the decade to 2021. Hobart suffered with the share of rental supply falling 11.2 per cent over the decade to 2021. Port Douglas and Noosa Heads faced similar falls.
How Grounded Community Land Trust Advocacy believes a cap n trade system will work to boost housing supply for longer term rentals. Picture: Supplied.
The study proposed a cap n trade system to curb STR growth by capping the number of Airbnb’s and creating a licence which gradually reduces over time.
“Over time, the number of licenses reduces, putting pressure on the 48 per cent of listed Airbnb’s that were not rented out. This pushes supply back onto the traditional housing market, allowing the community room to breathe.”
He said Paris alone would share in $140m in its first year of a cap n trade system being put in place – still leaving net $920m for Airbnb owners to enjoy.
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