Sydney is among the top cities globally for Airbnb rentals and the team at MadeComfy have analysed the data on occupancy rates, average revenue and booking volume in different suburbs across the city.
Welcome to the 2023 edition of MadeComfy’s Greater Sydney short-term rental (STR) market report.
Discover why property owners and investors like you are choosing to pivot their portfolios to Short-Term Rentals (STRs) and reaping higher rental returns as a result. Join us on a comprehensive journey that explores market trends driving STR demand in Australia's largest city. We'll help you understand how to capitalize on this growing trend.
Interested in joining the STR market? We can take you through the data presented in this report in more detail for Sydney and locations Australia-wide. Get in touch, call 1800 526 133, or email sales@madecomfy.com.au.
Sydney is a highly desirable destination for travelers due to its stunning harbor views, iconic landmarks, beautiful beaches, vibrant nightlife, and diverse cultural experiences. Visitors from all over the world come to Sydney for various reasons, including business trips, education, family holidays, and solo adventures.
When it comes to accommodation, many travelers prefer Short-Term Rentals (STRs) because they provide more options and flexibility compared to traditional hotels. Additionally, STRs' affordability and convenience make them an attractive option for travelers who want to experience Sydney like a local.
Sydney's Short-Term Rental (STR) occupancy rate experienced a significant increase of 26.7% in 2022 compared to the previous year, reaching a peak of 78.0% in April 2022. This upward trend continued into the December quarter with a notable 45.4% year-on-year increase. The strong demand for STRs in Sydney can be attributed to several factors, including the return of major sports and cultural events such as the FIFA Women's World Cup and Vivid, the normalization of international and corporate travel, as well as robust domestic demand. The city's high occupancy rates are also influenced by the summer holiday period and peak travel times such as Easter, ANZAC Day, and School Holidays.
Furthermore, the revival of China's multi-billion dollar outbound tourism market is expected to bring significant benefits to investors in the STR industry.
New South Wales has the most comprehensive regulatory regime for short-term rentals in Australia, which provides certainty and protection for property owners. The regulations and frameworks in place promote a sustainable short-term rental industry that benefits everyone. More information about the legislation related to short-term rentals can be found here.
As of 2022, all the regulatory frameworks have been fully implemented, and the industry now operates within clear guidelines that include:
Being the main urban market in Australia, Sydney has seen a significant number of highly desirable 1 and 2-bedroom rental properties, particularly in the Inner West, North Shore, and Eastern Suburbs. There are opportunities for larger format properties to enter the market in Greater Sydney that targets different guest types such as family, particularly in locations like the Blue Mountains and Northern Beaches.
Since October 2022, AirDNA’s data shows that Sydney has recorded more than 100,000 nights booked each month, with a continuous increase each month, reaching over 125,000 in January 2023. However, the number of available properties is still below pre-pandemic levels, contributing to higher ADRs.
Increasing demand is expected to persist throughout 2023 especially due to property volume being well below pre-pandemic levels, presenting an ideal time for property investors to participate in Sydney’s recovering short-term rental market.
NSW’s defined STR regulations are likely to keep supply down, but having a professional management solution that has a robust monitoring and pricing strategy to maximise revenue around the regulation and a dedicated corporate team that seeks out longer bookings like MadeComfy does, is the way to go. Don’t miss this opportunity to capitalise on the robust demand and generate greater rental returns for your investment property.
In 2022, MadeComfy achieved a RevPar (Revenue Per Available Room) performance that surpassed the Sydney market average by 12.1%. Furthermore, in the December quarter, this grew to 23.1% when compared to the market average. This impressive performance positions MadeComfy to provide excellent support to property owners in Sydney’s short-term rental market. Property owners who work with us can expect strong performance and higher rental returns on their investments.
The Blue Mountains, located just 90 minutes from Sydney’s CBD, is a popular destination for guests, with short-term rental bookings becoming the preferred choice for visitors due to the diverse property options, flexibility, and self-contained amenities. The results below indicate now is a great time to consider the STR market for your Blue Mountains-based investment property.
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Sydney’s inner-city boroughs and suburbs located in the CBD and near the beach, such as Elizabeth Bay, Woolloomooloo, and Bondi Beach are particularly popular among short-term rental guests. Sydney’s most popular suburbs are concentrated around the city centre and coastal regions. Inner city suburbs like Darlinghurst and Surry Hills remain consistently popular year-round due to their central location and broad appeal to different types of guests and travellers.
4 Guests 2 Bedrooms 1 Bathroom
When compared to a long-term rental (LTR) on Domain.com.au for a similar property advertised at $800/week, the MadeComfy property outperformed the LTR by 88.2% in the six months to February 2023.
STR net values are actual. LTR net amount is calculated as the weekly rate less 9.0% plus GST to account for average property management and advertising fees.
Our report shows that Sydney’s short-term rental occupancy rate rose by 26.7% in 2022, with rates increasing further to 45.4% year-on-year in the last quarter of 2022 for MadeComfy properties. International travel is recovering and corporate travel is normalising; however, there is a long way to go before STR supply reaches pre-pandemic levels, which is an opportunity for property investors to capture higher rental returns to cater to the growing demand.
While smaller properties are popular in more urban parts of Sydney, larger format properties in locations including the Blue Mountains and Northern Beaches are popular with travellers and are an opportunity for investors in these locations.
We forecast continued growth for 2022 as international travel continues its recovery, travellers return to visit major cultural and sporting events, and China’s major outbound market reopens. Inner city and coastal suburbs enjoy strong occupancy rates year-round and are exciting locations for prospective property investors when considering short-term rentals.
To get additional information on the short-term rental market in Sydney, reach out to us at sales@madecomfy.com.au. Our team will offer you a free rental assessment and show how much your property has the potential to earn.
