Rye’s front beach is a popular spot in summer, and the local supply of short-stay rentals reflects the high demand. Picture: Jason Edwards.
Melbourne’s Mornington Peninsula is Australia’s short-term rental capital with more than 40 per cent of potential rental homes in one suburb appearing on Airbnb.
But with the rising cost of living, soaring interest rates and heightened land-tax bills and regulatory burdens for landlords, short-stay lease operators are believed to be using the more lucrative rental format to keep up with costs.
Rye is the national capital, with an estimated 44 per cent of rental homes there tied into the platform.
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Also in the national top 10 were Capel Sound, Dromana, Mt Martha, Rosebud and Safety Beach.
The data comes as separate Mornington Peninsula Shire data has shown that in August this year there were 157 active homeless cases across the council area, including 107 were sleeping rough. It’s an increase from 105 a year prior, despite the council announcing plans to work towards a zero homelessness target last year.
There were also significant shares of short-stay rentals in central Melbourne where the 2732 Airbnb listings tracked accounted for 12.3 per cent of the wider rental market, adding to the 1043 (11.6 per cent) in Southbank and the 575 (10.2 per cent) in Docklands.
363 Point Nepean Rd, Dromana, has a secondary residence that returned $65,000 a year. The wider property is for sale at $2.5m-$2.75m.
2813/560 Lonsdale St, Melbourne, is achieving about $1200 a week as a short-stay rental, and is currently for sale at $1.08m-$1.18m.
Outside of the top 10 some of the city’s most desirable areas including East Melbourne, St Kilda West, Middle Park, St Kilda and Fitzroy all had between 6 per cent and 7.3 per cent of their rental market seemingly tied to short-stay rentals.
The report analyses listing data on Airbnb from this year and the number of homes listed as rented in the latest available Census data, and calculates what share of the total number are being offered as short-stay rentals. It was commissioned by Fox Removals.
Founder Daniel Hassell said it was likely many owners were responding to the financial benefits, with the right locations able to earn more being rented out by the night than they can as a long-term lease.
While for the most part the figures were relatively small compared to the wider rental market, he noted that in areas like the Mornington Peninsula their share became far more significant.
“When the local rental market is already relatively small, that sort of concentration matters,” Mr Hassell said.
“Every property being used for holiday accommodation rather than potentially being available to a permanent tenant means one less option for someone trying to find a place to live.”
502/3 Aquitania Way, Docklands, has been listed for sale at $440,000 and is advertised as ‘most liked’ on Airbnb.
Airbnb research compiled by Pureprofile in September this year found 73 per cent of hosts planned to use the money to help cope with the rising cost of living, with mortgages and bills as well as things like groceries the primary use.
About 37 per cent were planning to put the money towards an emergency fund.
Airbnb also supports emergency housing with Victorians impacted by bushfires earlier this year able to get 59 nights worth of free emergency accommodation.
Real Estate Institute of Victoria chief executive Toby Balazs said there was a reasonable chance that any increase in the number of homes for rent via short-stay accommodation would be driven by government changes to rules and regulations or rising costs.
“There’s a likelihood that the onerous cost and compliance requirements that private rental providers have traditional long term listings are driving them towards short stay options,” Mr Balazs said.
“And the interest rate hike this week will likely put more pressure on the vacancy rate and increase the cost of rents at a time when they are already at high levels. But what must be understood is that the cost of holding these properties is also getting higher.”
52A Elizabeth Ave, Capel Sound, is advertised for sale at $1.16m-$1.19m and is touted as an short-stay accommodation option.
Research by Griffith University has previously found 30-40 per cent of stays in short-term rentals are for extended work travel, or for people needing to travel for medical issues, to escape domestic violence or after being driven from their own home by natural disasters and hazards.
Mornington Peninsula based real estate agent Liza Milchman said that historically, most homeowners in the area had at least some interest in knowing their home’s value as a short-stay rental — and holiday rentals had been a high demand aspect of the area when she started 20 years ago.
Her two most recent sales have gone to buyers intending to make them available on short-stay rental websites.
“I’m not surprised at all by the data,” Ms Milchman said.
Former resident, Nat, is currently selling the Rye home she lived in for eight years before relocating into Melbourne. In the years that have followed it has become a highly successful short-stay rental, and last year turned over more than $158,800 in revenue — as well as more than $94,000 from January to August this year.
The 41 Melbourne Rd, Rye, property has been a strong performer with Airbnb, but with its proximity to the bay was unlikely to ever off an affordable rental for the long-term market.
Inside the home that earned more than $158,000 last year. It’s currently for sale at $1.42m-$1.45m.
The owner said she’d had no idea how lucrative the 41 Melbourne Rd home could be while living in the home, but after seeing friends in the area find success renting out a studio on their property had decided to try it out rather than sell the home or put it on the long-term rental market after they relocated.
“We were very surprised,” she said.
The vendor noted that being near the beach had likely helped its success, but added that it was unlikely given the location, and the exhaustive renovation they did on the home, that it would have ever been offered as an affordable rental option.
“People do comment that it’s beautiful and how much the love the surroundings — it’s not your average cookie cutter beach house vibe,” she said.
In the same street, she was only aware of one home that had been offered as a long-term rental.
Australia and New Zealand Short Term Rental Association chair Yoav Tourel said it was worth noting the research did not necessarily show that homes had been taken out of the long-term rental market — just where they counted towards a high share of the market.
Victoria’s Labour government, headed by Ben Carroll when it went into caretaker mode ahead of the state election, has implemented a long series of rental and tax reforms that have added to the cost of maintaining investment properties and holiday homes. Picture: Ian Currie.
Mr Tourel noted that in many cases homes listed on sites were there as a part-time offering that was also the holiday home for their owners for several weeks of the year.
“For many Australians, short term rental accommodation provides supplementary income to help meet rising mortgage costs, cost-of-living pressures and retirement needs,” he said.
“Homes move between different uses over time depending on owners’ life stages, family needs and work patterns, so a share of listings doesn’t tell us how those homes would otherwise be used.”
Rye — 623 listings on Airbnb, 44.2% of local rental market
Capel Sound — 141 listings on Airbnb, 18.1% of rental market
Dromana — 149 listings on Airbnb, 17.9% of rental market
Mt Martha — 177 listings on Airbnb, 17.3% of rental market
Rosebud — 298 listings on Airbnb, 16.1% of rental market
Safety Beach — 108 listings on Airbnb, 15.6% of rental market
Melbourne — 2732 listings on Airbnb, 12.3% of rental market
Southbank — 1043 listings on Airbnb, 11.6% of rental market
Docklands — 575 listings on Airbnb, 10.2% of rental market
Mt Eliza — 50 listings on Airbnb, 8.7% of rental market
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