There has been a bit of news and a bit of analysis around Airbnbs and the impact they have on the housing market, if any. So we did a little digging.
What we found is that the answer depends on where you look, how you measure it, and who you ask. There is no single narrative. But what is clear is that in some towns, Airbnbs are changing the way homes are used, bought, and rented — and that has consequences for locals.
The case against short term rentals
A growing number of tourism heavy communities across Australia are reporting the same pattern. More homes are being listed as short term rentals, and fewer are available for locals to rent or buy.
A report released in June 2024 by Grounded, a not for profit organisation focused on housing justice, looked at 13 regional tourism areas across the country. These included Noosa Heads, Byron Bay, Apollo Bay, the Whitsundays and Hobart. The report found:
- Short term rentals earned 81 percent more profit than long term rentals
- STR investors took in an average of 48,980 dollars per year per listing
- 74.2 percent of all new homes built in these towns over the past decade became STRs
- In Noosa and Apollo Bay, STRs outnumbered long term rentals two to one
In Warburton, STR listings grew almost ten times faster than total housing supply. In Byron Bay, 124 percent of new housing went to STRs. That means new builds are being absorbed by the short stay market at a rate that leaves little left for locals.
These changes are being felt on the ground. In towns like Apollo Bay, some childcare centres have closed due to a lack of staff who can afford to live nearby. In Hobart, long term rental availability fell by more than 50 percent. The Grounded report found the average decline in long term rental supply across all 13 towns was 4.8 percent over the past decade.
The bigger picture: what the national data shows
While the local impacts are clear in these tourism regions, the national story is more complicated.
According to a 2024 study by Urbis, commissioned by Airbnb, short term rentals make up just 1 to 2 percent of the total housing stock in Australia. In big cities like Sydney and Melbourne, where housing stress is high, STR volumes remain relatively low.
This suggests that Airbnb is not a primary driver of housing shortages on a national scale.
Similarly, a US based study published by Springer found that a 1 percent increase in Airbnb listings was associated with a 0.015 percent rise in rent and a 0.026 percent increase in property prices. These are small changes per listing, but the impact becomes more noticeable as STRs expand in volume and geography.
Another analysis, shared by the Centre for Equitable Housing, noted that short term rentals reduce the availability of long term housing where they are most concentrated. The effect may not be felt across entire cities, but in certain postcodes and suburbs, the pressure is visible.
A global issue, not just an Australian one
The same tension is playing out across the world.
In Barcelona, the city government recently announced it would remove over 10,000 short term rental licences by 2029, with the mayor saying housing is for living, not for making money off tourists.
In Amsterdam, STRs are restricted to a maximum of 30 nights per year unless the host has a permit. Similar rules exist in Paris and Lisbon, where local residents have been priced out of their own neighbourhoods.
In Venice, STR rules have been introduced to stop the hollowing out of residential streets. And in Santorini, concerns have been raised that STRs are eating into the housing supply for seasonal workers who power the tourism economy.
In 2024, travel operator TUI blamed short term rental platforms for worsening overtourism and damaging community life, stating that STRs — not hotels — were placing unmanageable strain on housing in popular destinations.
These responses show that while Airbnb may be a small part of a national market, its concentrated presence in specific cities or towns can create outsized effects.
What about regulation
In Australia, several approaches are being tested.
- New South Wales has capped STRs in some areas at 180 days per year
- Victoria has proposed a 7.5 percent levy on short stay accommodation
- Byron Bay and Noosa councils are considering zoning limits to restrict STR density in residential neighbourhoods
Some local governments charge modest annual fees for STR licences. Others are lobbying for broader reform. But many of these measures are still new, and their impact has yet to be properly assessed.
An idea with legs: the cap and trade model
The Grounded report also introduced a policy idea known as the Locals First Cap and Trade system. Rather than banning STRs or applying blanket limits, it would:
- Cap the total number of STRs allowed per region
- Auction STR licences every two years
- Direct the funds raised to Community Land Trusts (CLTs), which build and manage permanently affordable housing for locals
In Noosa, the report suggests this system could generate 19 million dollars per year, funding 40 new affordable homes annually. That is housing not dependent on the market, but secured in perpetuity for workers and families who need it.
This model is designed to rebalance the market gradually, using price signals and licensing rules. It also prioritises returning STRs to their original purpose — as temporary lets of spare rooms or holiday homes, not full time investment properties.
The Good Builder take
Airbnb is not the villain behind the housing crisis. The data shows its footprint is relatively small across Australia. But in areas where housing is already tight and tourism is strong, STR growth can have real consequences.
The challenge is to regulate STRs in a way that preserves tourism, supports local economies, and protects housing for those who live and work in these communities year round.
Banning short stays is too blunt. Leaving them unregulated is too risky. A targeted, well designed system like the cap and trade model proposed by Grounded offers a pathway forward, one that uses the market to solve the very problem it helped create.
As councils and governments consider their next move, the question is not whether STRs belong in the housing market. It is how much space they should take up, and at what cost.
We’d like to hear your take too, so get in touch.
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