Panel Paper:
Airbnb and Rental Markets: Evidence from Australia
Friday, November 9, 2018
Tyler - Mezz Level (Marriott Wardman Park)
*Names in bold indicate Presenter
Examining the impact of short term rental platforms on the private rental sector is a difficult exercise in many Australian cities because of the dynamic nature of their housing markets. For example, dwelling approvals per one million population in Australia’s two largest cities, Sydney and Melbourne are running at about six times the rate of New York City. However, the city of Hobart, which is the capital city of a small Australian state, has very little development activity, but a strong tourism market and a fast growing short term rental sector, which enables the impact of short term rentals on the long term private residential market to be examined in detail. This paper tracks outcomes in the private rental market against strong growth in short term rentals since the short term rental market was deregulated in 2016. It also demonstrates the use of vacancy rate data to predict private rental trends and demonstrates how the use of average annual returns from short term rental market is a poor predictor of owner behaviour. This Australian case study has a number of policy lessons for other cities with rapidly growing tourism sectors and slow growing private rental markets and discusses some potential policy options for policy makers.
