As many home owners in NSW would know, the NSW Government made an announcement on the 19th April that it accepts nine out of the twelve recommendations proposed by a report that was tabled by a Parliamentary Inquiry into the adequacy of regulation of short-term holiday letting in October 2016. Whilst a positive step, the Government now intends to undertake further consultation with relevant stakeholders before it releases an options paper on the potential approaches to regulating the short-term rental market.
At MadeComfy, we were happy to hear this announcement, as we believe it provides a needed clear direction from which homeowners and property investors can continue to let their property on platforms such as Airbnb and Stayz. It is also a step toward providing a uniform policy to regulating the industry, where currently local councils and owner’s corporations enact their own regulations resulting in overlapping and conflicting policies.
Based on this announcement, we believe that the Airbnb market will not see an influx of owners listing on the booking platform, but rather take confidence they can continue to do so with more clarity around their rights and responsibilities. With 24,000 entire home listings on Airbnb at the end of 2016 and a year-on-year growth of 85%, we expect the growth of Airbnb listings to remain at the current pace for the coming year, which indicates 44,000 entire home Airbnb listings in Sydney by the end of 2017. This assessment also takes into account that of Sydney’s almost 2 million properties, only 1.2% have been listed on Airbnb at some stage, suggesting there is still room for growth, however, represents only a small proportion of Sydney’s rental market.
Sabrina Bethunin, one of MadeComy’s co-founders, believes this support by the NSW Government will hopefully result in short-term rentals being a viable option for every homeowner in NSW without fear of legal or financial penalties.
In addition to that, with the median property price in Sydney having reached over $1 million, households are dedicating an average of 44 percent of their income to service their mortgages. It means Sydneysiders are considered under ‘mortgage stress’ as they are devoting more than 30 percent of their income to mortgage repayments. Either by renting a spare room or the whole property when it’s not utilised, for many homeowners, Airbnb and similar platforms provide a means to obtain an income to help cover their mortgage repayments or afford their holidays.
A key component in the future regulation of short-term rentals in NSW will be the State Government's response to how it can be undertaken in strata-managed buildings. As the recommendations from the Government's announcement in April was not definitive. Until regulations are legislated, we advise that all owners should adhere to their building by-laws in terms of whether short-term letting is permitted or not.
As at MadeComfy, we are aware that many owners and strata managers have concerns regarding short-term rentals, a key one being ensuring the harmony between guests and neighbours. MadeComfy seeks to address this issue through its guest screening process prior to accepting a booking, as well as enforcing strict house rules such as a no party policy and maximum occupant numbers. With these checks in place, our service is designed to mitigate against any unruly guest behaviour, providing neighbours and strata managers with confidence that short-term rentals can be managed without negative effects in their building.
We’re confident the future of short-term rentals looks positive in NSW and will keep owners abreast of future developments in this space.
What are your thoughts about the NSW Government’s announcement regarding short-term rentals? Let us know in the comments below.
MadeComfy provides an end-to-end property management service, which means property owners don’t need to do a thing when they hand over their keys. MadeComfy makes the process of earning greater returns from short-term renting effortless, achieving up to 40% more than self-managed Airbnb listings. Get in touch with us today to see how we can help!