Property owners are leaving the short-term accommodation market like Airbnb in favour of long-term renting as the rising cost of living dampens appetites for holidays on the Gold Coast, according to a property management firm.
Australian Bureau of Statistics census data suggests one-in-10 properties on the Gold Coast are empty, while about 10 per cent of the city’s population are either homeless or living in unaffordable housing.
There are more than 11,000 registered Airbnb properties on the Gold Coast according to council data.
The director of property management firm Manage My BnB, Linda Hildingsson, said she had noted a decline in short-term rental bookings “with each rates rise that we’ve had over the last six months”.
“Easter was nearly 40 per cent down on last year,” Ms Hildingsson said.
She said of the 140 short-term letting properties her business manages about 50 have converted to long-term renting.
“They just weren’t booking out at all,” she said.
She said prices for beachfront properties increased from $350 to $500 in 2022 but have since fallen.
“We’re just not seeing that anymore,” she said.
“Prices have declined a little bit, maybe 20 per cent from last year, but we’re seeing an upswing in bookings for the later part of this year.”
Ms Hildingsson said some landlords are switching to the long-term rental market because it provided better certainty.
“The market moves with inflation and rate rises. It takes a little while,” she said.
“My clients have been used to such high income of late, and then you go ‘look, we’ve got to lower it a little bit’.”
‘I lost my income’
Investment property owner Courtney Brown said her two bedroom unit in Kirra has been “consistently booked” over the past four years.
“I’ve made good money on it,” she said.
“I’ve probably had it at 85 per cent occupancy for the whole four years.”
While she would charge between $85 to $200 a night, depending on the season, Ms Brown said she had decided to lease it out on the long-term rental market.
“It’s been actually an emotional decision because it means I can’t go there, my kids can’t holiday there anymore,” she said.
“I’ve held out as long as I really can.”
She said since the start of the year she had noticed a significant downturn in her Airbnb bookings.
“I lost my income from my unit. It was paying my mortgage and my rates and my body corporate. Now it’s not covering anything,” she said.
“People aren’t spending, people aren’t going away as well because that’s more of a luxury.
“As it’s become really quiet I looked at my account statement [and said] ‘I don’t have the money to cover this’.”
‘High highs to low lows’
Holiday Property Services, a cleaning company for short-term accommodation on the Gold Coast, has seen occupancy rates among its clients drop by between 60 to 75 per cent.
“We were sitting at over 90 per cent from August through to February this year, and that’s I think just coming out of COVID. People needing to get out and book a holiday,” said client liaison officer Cathy Dillon.
“We’ve gone from high highs, to such low lows.
“Owners are removing their properties from the short-term rental platform and putting permanent renters in their properties to try and cover costs.”
Ms Dillon said “people are just fearful that this may go on for the next 12 months”.
“It’s another interest rate hike, another interest rate hike, another interest rate hike — people are scared,” she said.
Ms Dillon said her business “is locking in, holding on”.
“We’re looking at ways how we market extra services, also reducing overheads, just to tighten things up a bit,” she said.
Councils consider change
It costs about $8,000 to register a short-term letting with Gold Coast City Council.
Mayor Tom Tate said that due to council concerns that owners were listing their properties without paying the registration fee and the higher annual rates, council officers will be going “door-to-door”.
“It’s almost like [parking inspectors], but we’ll monitor water consumption, car parking. We’ll have data to be able to back us up,” he said.
Cr Tate said if people were “intending to make a business out of it, pay a business rate”.
Last week, Brisbane City Council announced it will hike rates for short-term accommodation by 50 per cent.
Byron Shire Council has moved ahead with plans for a 60-day annual cap on short-term holiday letting in an effort to address the region’s housing crisis.
While rental vacancy rates on the Gold Coast remain among the tightest in the country, Cr Tate said he had not considered introducing a similar cap.
“I would rather let the market dictate,” he said.
“People have already invested to do that. I don’t want to pull the rug from under them.”
A spokesperson for Airbnb said “neither Airbnb nor our host community is opposed to short-term rentals being regulated”.
“We support the introduction of statewide regulatory frameworks. We have previously voiced our support for statewide registration for the short-term rental sector, as well as a mandatory code of conduct,” the spokesperson said.
“Airbnb provides information to our host community regarding applicable local laws and regulations. We provide information and education materials through our Responsible Hosting website.”
Article source: Queensland Property Investor