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There are five ways that short-term rentals are impacting Australia’s property sector, according to insight from a property management company.
MadeComfy has spoken out about how short-term rentals have taken both the property and hospitality industries by storm, generating approximately $1 billion worth of revenue over the last year.
Australian short-term rental industry grew by 47 per cent during the same time period, the property management company added, with approximately 30,000 more homes being leased on a short-term basis.
“The concept of the sharing economy has completely transformed the hospitality industry by offering alternative options to traditional accommodation options like overpriced hotels or serviced apartments that have no character,” said MadeComfy co-founder Quirin Schwaighofer.
“It has also impacted the property market by allowing home owners or investors to generate higher returns than if they lease their home in a declining long-term rental market.”
According to Mr Schwaighofer, the top five ways short-term rentals have impacted property and hospitality are:
1. Bolstered support and flexibility
“Short-term rentals can be an investor’s economic lifeline to assist paying off bills and a mortgage, especially with the increasing long-term rental vacancy rate in cities like Melbourne and Sydney,” he said.
“Short-term rentals also offer property owners flexibility, especially those living abroad and wanting to use the property when they visit home.
“We bring a lot of properties back on the market that would otherwise be empty and unused. Still, there are over 140,000 empty properties in the wider Sydney and Melbourne area alone!”
2. Better economic conditions
“The short-term rental industry has directly contributed to over $842 million in gross domestic product in 2016,” Mr Schwaighofer said.
“Guest expenditure on services and goods within the economy during their stay, as well as a host’s purchase of intermediate inputs has also indirectly added $5.716 million to the Australian economy. Since 2016, the market has more than doubled.”
3. New job generation
“Our industry is still relatively new, yet within a small period of time has significantly contributed to the Australian job market, giving over 40,800 people full-time employment, over $1.041 million in wages and salaries during 2016,” he said.
“MadeComfy alone has created jobs for over 100 people in Australia and we support many other small to medium businesses through partnerships.”
4. Greater tourism to suburban and regional areas
“Booking platforms such as Airbnb have become an increasing preference among travellers as they have provided tourists with more accommodation options in areas where there has been a lack of accommodation options,” Mr Schwaighofer said.
“The home-sharing economy has empowered remote areas and suburbs, as they are now able to profit from tourism spending, which previously only benefited central cities with large hotels.
“A significant portion of guests are visitors of family members living in suburban areas of Australia. Without the short-term rental option, these guests would probably have to stay further away from their family.”
5. Increased guest expectations
“With the exponential growth of the short-term rental sector, come more choices for guests, and higher competition among property owners,” he said.
“Guest expectations are continuously rising, therefore property owners need to ensure their property stands out from the crowd and is priced accordingly to earn the best returns and give guests a five-star experience.”
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.