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Limit Airbnb to certain areas to balance the market, says expert

12 October 2018 Tim Neary
Airbnb mobile application

The Airbnb phenomenon is putting pressure on the rental market and exacerbating the country’s housing affordability issues, but limiting it to certain areas will go a long way to balancing the market, one expert has claimed.

RiskWise Property Research CEO Doron Peleg has said that this is particularly the case where there is rental oversupply close to the city, as in Melbourne and Brisbane.

“In an ideal world, Airbnb would only be allowed in certain areas based on demographic, supply of properties and other considerations such as supporting the local economy,” the CEO said.


Mr Peleg said that Airbnb has a “sustained impact” on the entire population and that it is capable of making demographic changes.

“If the proportion of short-term stays is high, it pushes families out, not just because they can’t afford to live there but also because they don’t want to live next door to party houses,” the CEO said.

“It must be balanced against the needs of the current residents as well as demand, and take housing affordability into account.”

Mr Peleg said that Airbnb had proved a lifeline for investors unable to find tenants in an oversupplied rental market, such as inner-city Melbourne.

However, at popular holiday destinations such as Byron Bay, the service had helped force long-term tenants out of the market and increased property prices.

“In areas such as these, and particularly in beachside suburbs, we see the overall demand for properties by investors and owner-occupiers going up.

“Investors know they can use the property for Airbnb and many put in place leasing contracts that only last 10 months, so they are vacant during summer for the holidaymakers, and this supports the demand for properties.”

Mr Peleg added that when home buyers try to enter the market, they are faced with competition from investors, which drives prices up.

“And those looking for long-term leases generally aren’t keen on moving every few months due to Airbnb, so then that also encourages them to buy, which again means there are more competing for properties and pushing prices up.

“It’s a phenomenon [that] we are seeing around the world.”

Limit Airbnb to certain areas to balance the market, says expert
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