Airbnb has shifted the paradigm when it comes to how people travel ever since its launch just over a decade ago. Global holiday rental listings have increased by a staggering 140% over the past two years and it’s expected to see even more growth.
With thousands of property owners and investors actively participating in the Australia short term rental (STR) market, you might be curious to know just how much you can make renting your home or investing property full-time on Airbnb.
Looking for a more detailed analysis of Australia's short-term rental trends? Receive a free copy of the Australian short-term rental report to be sent to your email using the link below:
Factors affecting host income
The actual income earned by hosts is dependent on a range of factors such as location, demand, property type, seasonality, amenities, occupancy rate, guest booking experience and service fees charged. In this article, we have gathered available Airbnb listing data to help you get a better understanding of host service fees and incomes on STRs in Australia and around its major cities.
In the twelve months leading up to February 2019, Australia’s STR supply has seen an increase of 47%, or nearly 30,000 new entire homes added to the market. Nationwide, these types of holiday STRs generated $3 billion in revenue.
Source: AirDNA Report 2019
What is the average rental revenue in Summer vs. Winter?
Last year, hosts in Australia achieved the greatest average revenue in January, renting out 1.9 million nights and the lowest in May. New hosts should look to get their property ready as soon as possible to prepare for upcoming high seasons where strong average rental revenue growth is expected especially from November 2019 to February 2020.
Source: AirDNA 2019
From May to December 2018 supply fluctuated 80% as numerous local part-time hosts activated their property listings to monetise on high demand.
Average Daily Rate
Revenue Per Available Room
What percentage does Airbnb take from hosts?
The net income earned by Airbnb hosts must also take into the account the cost of listing their property on the platform, which has a direct service fee for hosts.
Airbnb has two different service fee structures, depending on if you are an individual home host or a hospitality business.
The fee is calculated from the booking subtotal which compromises of the nightly rates plus cleaning fees; individual home hosts can expect to pay a service fee of approximately 3% of total booking revenue.
Breakdown of Australia’s largest markets
In 2018, around three quarters of properties in Sydney were booked between just 1 to 3 months and this means almost 75% of the market is made up of seasonal part-time rentals. However, Sydney has one of the highest average monthly revenue as well as active hosts.
- 29,367 active rentals
- 19,694 active hosts
- Average daily rate: $199
- Occupancy rate: 70%
- Monthly revenue: $2,755
- 64% of rentals are entire homes
Melbourne closely follows behind Sydney when it comes to average monthly revenue and earnings from short term rentals actually exceed Sydney depending on the month. In the past year however, Melbourne realised a slightly lower occupancy rate than Sydney.
- 21,683 active rentals
- 12,932 active hosts
- Average daily rate: $185
- Occupancy rate: 65%
- Monthly revenue: $2,640
- 72% of rentals are entire homes
In Queensland, Gold Coast and Sunshine Coast have higher potential earnings than Brisbane, but the state capital has seen an exponential growth in number of listings and revenue growth. Moreover, Brisbane can be an attractive option for investors as the median house price is significantly lower when compared to other major hubs such as Sydney and Melbourne.
- 6,757 active rentals
- 4,367 active hosts
- Average daily rate: $148
- Occupancy rate: 67%
- Monthly revenue: $2,033
- 64% of rentals are entire homes
Breakdown of Australia’s emerging markets
Hobart beats Melbourne with regards to its average daily rate and the occupancy rate for the two cities are on par. This showcases the city’s earning potential and with fewer hosts to compete with, the barrier to entry is much less as opposed to other capital cities.
- 1,108 active rentals
- 830 active hosts
- Average daily rate: $182
- Occupancy rate: 70%
- Monthly revenue: $2,977
- 80% of rentals are entire homes
Perth has seen the lowest percentage of annual rental growth, but its occupancy rate can make up for it as it’s higher than that of both Sydney and Brisbane.
- 5,467 active rentals
- 3,553 active hosts
- Average daily rate: $131
- Occupancy rate: 68%
- Monthly revenue: $1,962
- 68% of rentals are entire homes
From all of the cities above, Canberra has the lowest number of hosts, but it has the highest occupancy rate. Its average daily rate is similar to that of Adelaide and hosts on average can expect to make $2,721 a month.
- 1,124 active rentals
- 778 active hosts
- Average daily rate: $157
- Occupancy rate: 79%
- Monthly revenue: $2,721
- 63% of rentals are entire homes
To sum up, Airbnb has enabled homeowners and investors to capitalise on their spare rooms and entire homes since its launch in 2008. Market research demonstrates an increased popularity of short-term vacation rentals across the Australia. Throughout the country, you can expect an average daily rate of $200, but this heavily influenced by seasonality as the rate can reach $307 in high seasons. Despite seasonal fluctuations, the top earning homes in Australia still generated six figure revenue last year.
Learn more about the short-term rental market of Australia to help you make the best investment decisions.