NSW plans crackdown on ‘Airbnb’ rentals

The NSW government is moving to crack down on Airbnb style short-term rentals and vacant holiday homes in an effort to put some of the state’s 50-60,000 untenanted dwellings back into the rental market.

The government says it is responding to a housing crisis that has seen residential rents reach astronomical levels while availability is at an all-time low and homelessness and rough sleeping is increasing.

All these proposals and more are in a discussion paper released this week, examining how short-stay rentals and holiday homes could be returned to the long-term rental accommodation market.

The ideas touted are clearly intended to make it financially less attractive for investors to take their properties out of the residential market and list them as holiday lets.

A booking charge imposed on holiday rental websites like Airbnb and Stayz – such as the “Airbnb  tax” brought in by the Victorian government last year –  is mooted  in the discussion paper.

The document cites jurisdictions around the world that impose charges on short-term rentals, including Germany, France, the US and Canada. Booking platforms collect the levies on behalf of the governments.

Limits on the number of guests allowed in short-stay rentals, daily fees per guest, and lower annual caps on the maximum number of nights a short-stay rental can be listed were among other measures being considered, says an ABC radio story.

The paper also proposed higher registration fees for short-term rentals, more onerous planning and approval requirements and limits to the number of homes in an area that can be used as short-term rental accommodation.

“We know the housing crisis is real and we don’t want any part of the housing market to be unexamined – everything’s under the microscope,” Housing and Homelessness Minister Rose Jackson said.

The highest concentrations of short-stay rentals are in the Byron Shire and along the state’s south coast in areas like the Shoalhaven, Kiama and the Eurobodalla Shire Council.

Confirming the cause and effect of holiday homes on rental accommodation, Byron Shire has the highest number of people sleeping rough in the state, and overtook the City of Sydney as the local government area with the most rough sleepers in 2023, according to a Sydney Morning Herald report.

Up to 35,000 homes across the state are let as “whole homes” throughout the year, claims the discussion paper. Another 45,000 properties are used as occasional holiday homes and a further 15,000 are left vacant all year.

Ms Jackson said it was clear these “under-utilised properties” were having an impact on the availability of long-term affordable housing.

Since the end of 2019, advertised prices for long-term rentals in NSW have increased more than 38 per cent and last year alone rose 14 per cent, according to a Sydney Morning Herald report.

Meanwhile, the vacancy rate in Greater Sydney was 1.7 per cent in December, below a 10-year average of 2.3 per cent.

“Renters have seen rents skyrocket in NSW, our vacancy rates are very low, they’re close to one per cent of vacant rental stock in some areas,” Ms Jackson said.

NSW residents and other interested parties have four weeks, until March 14, to respond to the discussion paper.