The article itself is specifically about Queensland, so I thought about submitting this to [email protected], but I think it highly likely that similar results would be found in any major Australian city, so hopefully it goes okay here.
There is little evidence to support the claim that increasing STRA intensity accounts for a substantial proportion of the increase in rents observed since the start of 2020
I note that it says “a substantial proportion”, rather than “any”. It seems to me that there are a large number of factors at play here. And while STRA is probably far from the largest one, it is nevertheless a factor at play, and if left unregulated, is likely to become more of a problem, especially coming in to the 2032 Olympics. So while I think this report is reason enough to refute those calling for banning STRA, I don’t necessarily think it means they shouldn’t be paying higher rates or otherwise regulated and discouraged compared to long term accommodation.
This can and should be done alongside supply-side changes such as upzoning all low-density residential to low-medium density residential at a minimum, as well as regulatory changes protecting tenants’ rights, and building a shit tonne more public housing.
Some interesting findings:
- As of the first quarter of 2023, there were 32,033 active short-term rental accommodation (STRA) listings for 19,773 active STRA dwellings, of which 11,193 dwellings were estimated to be used for STRA on a permanent basis.
- Permanent STRA dwellings account for less than 1% of the total dwelling stock in Queensland.
- The availability of active entire-home STRA, on average, is about 80% on a quarterly basis, with an average utilisation rate of 60% for apartments and 50% for houses.
- The average revenue per available STRA dwelling has a strong seasonal dynamic closely tied to holiday periods.
- Active entire-home STRA are comparable to hotel accommodations in terms of occupancy and profitability, suggesting a strong financial incentive attached to the STRA business in Queensland.
- A clear benefit of STRA goes to landlords who can now more effectively diversify into the short-term rental market.
- Benefits also accrue to travellers, who now potentially have a greater choice of rental accommodation that may also be more affordable and better suited to their needs.
- More accommodation options might facilitate more visitors or potential longer stays in a region creating larger economic benefits.
- It is noted that not all travellers using STRA are tourists. Other important categories of users include people staying near hospitals for medical treatments, people relocating from interstate or overseas, and workers on temporary job assignments.
- STRA offer local residents a form of home business to assist with housing cost. This is particularly true of hosted stays.
- STRA have been shown to support additional small business, particularly those offering services to short-stay visitors such as cafes, restaurants, laundromats, convenience stores, etc.
- STRA-related businesses may also support entrepreneurial activities in regions with historically fewer such opportunities.
- Neighbourhood change related to STRA may also displace businesses catering to longer-stay residents. These may include car repair services, dental clinics, and other services that short-stay visitors are unlikely to use.
- There is international evidence to suggest that STRA impacts hotel performance. However, higher quality hotels and chain hotels are found to be less affected by STRA.
As for the impact on renting and rental affordability:
- STRA is a small contributor in explaining rent prices. The contribution typically in the range of 0.2% – 0.5% from an increase of 10% in the total number of STRA total listings, else equal.
- Dwelling stocks are a significant contributor in explaining rent prices. The contribution of a 10% increase in the overall stock of dwellings is expected on average to lead to a decreased in rent prices in the range of 1% to 2%, else equal.
One aspect that I would have liked to have seen investigated is the impact STRAs have had on rental supply. The research seems to downplay the impact on overall dwelling supply, explaining that STRAs are less than 1% of total stock, but there was no review on whether STRAs have removed dwelling supply that would have otherwise belonged to the long-term market. We know that there are approximately 31,000 QLD households on the public housing waitlist, so having ~20,000 dwellings used for STRAs instead of long-term rentals is a factor worth investigating, but this is not explored in the research.
This is the best summary I could come up with:
The report found significant evidence that a rising rental shortage combined with more people moving to Queensland were the primary causes of market disruption.
The ABC asked whether the report invalidated the council’s reasons for increasing rates on short-stay providers.
Short-Stay Accommodation Taskforce chair and city councillor Fiona Cunningham said the council was committed to balancing the rights of long and short-term renters.
“The Short-Stay Accommodation Taskforce will engage with all stakeholders and ensure Brisbane strikes the right balance between having short-stay accommodation available in the right areas during major events and limiting the impacts on residents.”
Real Estate Institute of Queensland chief executive Antonia Mercorella, a longstanding critic of the council’s “stick approach”, said the report’s findings were validating.
While the report found scarce evidence that short-stay accommodation caused rent hikes, it warned it could push rents up in “a limited number of hot spot locations” if the number of short-stays increased.
The original article contains 355 words, the summary contains 151 words. Saved 57%. I’m a bot and I’m open source!
