One year after the Byron Shire Council introduced a 60-day cap on unhosted short-term rental accommodation (STRA) to improve the region's long-term rental availability, data showed the opposite has occurred.
An independent analysis by Frontier Economics found that the strict STRA regulations introduced by the Byron Shire Council in September 2024, which placed a 60-night cap on unhosted STRAs, have not improved rental availability.
The report showed that the regulations had little impact on the number of nights that STRA properties were occupied over the year, whilst the availability of long-term rentals remained largely unaffected.
Conversely, rental availability in the Byron Bay area has fallen, while rents have reached their highest-ever level at $1,193 per week.
The change in STRA regulations in Byron Bay followed years of higher rents and housing stress than most of NSW, driven by strong tourism demand, sea changers, remote workers, and limited new housing supply.
While the NSW government had introduced a 180-day cap, the Byron Shire shortened it to 60 days in a bid to improve rental availability.
According to the report, while holiday homes and STRA have been visible, data showed that only 11 per cent of dwellings have been registered as short-term rentals, below the 25–35 per cent estimates, with no evidence that they have been reducing permanent housing.
Australia and New Zealand Airbnb country manager, Susan Wheeldon, said that the data showed the increase in regulations had not achieved the intended effect.
According to the report, the 60-day STRA cap in Byron Shire has had no measurable impact on the long-term rental market, with the total number of rentals falling slightly and rents reaching record highs over the 12 months to September 2025.
Similarly, nearby regions like Ballina and Coastal Clarence showed similar trends, with the report confirming the cap did not affect bond lodgements or rents, and did not improve affordability in Byron Bay.
“This report confirms targeting short-term rentals is not a silver bullet to deal with the housing challenges in Byron Bay and distracts from the real need to build more homes,” Wheeldon said.
“We remain committed to working with the Council and NSW Government on practical solutions – but targeting short-term rentals won’t fix the housing shortage.”
“We need action that boosts supply and protects tourism jobs that local communities rely on.”
With the region proving an attractive tourist destination, the report showed a need to increase new builds to support both long- and short-term accommodations.
Frontier Economics economist James Key said that the cap had failed to deliver on its promise to alleviate stress on the rental market.
“Our independent analysis found no evidence that the 60-day cap shifted properties into the long-term rental market or improved affordability.”
“The lack of new housing supply remains the primary challenge for Byron Bay,” Key concluded.
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