Powered by MOMENTUM MEDIA
realestatebusiness logo
Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

rpm logo latest

New Victorian Airbnb legislation could negatively impact the unit rental market, says expert

23 August 2018 Tim Neary
Victorian Airbnb legislation, rental market

RiskWise CEO Doron Peleg said that Airbnb has proven to be a lifeline for investors in an oversupplied Melbourne rental market, but that the new legislation could deter investors from using the platform.

“Airbnb in Victoria helped absorb the large number of rental properties available in the market,” Mr Peleg said.

“One of the reasons investors went ahead with buying these rental properties despite there being a high risk of oversupply, and therefore also low rental returns, was because they knew they could use Airbnb as an alternative to generate rental income outside of the standard long-term rental property cycle.”

Mr Peleg’s comments follow the Victorian government’s move to make Airbnb apartment owners pay neighbours compensation of up to $2,000 for property damage caused by guests, while unruly visitors could face fines of up to $1,100.

Advertisement
Advertisement

He said that when it was introduced in Victoria, Airbnb had a big impact on the rental market, absorbing a “very” large number of properties. 

But Mr Peleg said that the new legislation could serve to deter investors from listing their properties on Airbnb, and this would have a flow-on effect of increasing the pool of rental properties in the “standard” rental market.

He said that this could consequently impact rental prices.

“This legislation didn’t come out of the blue,” the CEO said.

“There’s been lots of complaints and the problems have been widespread, with owners not having to face up to any responsibility for the actions of those staying in these short-term leases.

“But now they can face a fine of up to $2,000. It is certainly going to stop a lot of them entering into Airbnb short-term stays. Interestingly, New York is a good example of how Airbnb can affect the rental market. There, Airbnb is said to be responsible for ‘aggravating’ soaring rents and new legislation aims to significantly clamp down the company’s accommodation listings.”

New Victorian Airbnb legislation could negatively impact the unit rental market, says expert
forrent house reb 1
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network

 

Subscribe to our RPM mailing list

 

Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.