Airbnb decline benefits long term rental market

COVID's disruption of Airbnb leads to an increase in rental supply for Sydney home finders

COVID-19 presented a unique set of circumstances for all accommodation providers, many adapted creatively to the loss of tourism but the pandemic also revealed an interesting side effect… The huge impact of active Airbnb properties in residential neighbourhoods unfolded and the real effect that Airbnb’s have on long-term rental prices and homelessness highlighted.


“The correlation between reduced Airbnb activity and increasing long term rental supply is observable.”

The conversion of Airbnb’s back to long term rental is thought to have been motivated by the stability of long-term rental revenue in the absence of tourism, and this has driven down the number of listed Airbnb listings observed.

The report concludes: “The implication for policymakers is that the impact of increasing Airbnb activity on housing markets can be potentially reversed, presenting an important consideration in the context of housing affordability which is a challenge facing many global cities.”

Finally, the report calls for further studies to be made and also questions whether the downward trend identified of short term Airbnbs may just shift to new locations outside of the city for instance to regional NSW. Suggesting: “Airbnb effect may not be reversed, merely shifted to new tourist locations”.

Homelessness in Australia increased by 13.7 percent in the five years leading up to the ABS Census in 2016 and one in every 14 live on the street. NSW has both the largest and fastest-growing homeless population and since COVID-19 women over 45 are at greater risk of homelessness.  

According to, “evidence shows the pandemic and associated lockdowns have increased rates of domestic violence, mental distress, housing stress and hurt the academic performance of disadvantaged children”.

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3 years ago

This research is an excellent contribution and it is consistent with other Australian and international studies. The Reserve Bank of Australia has found that vacancy rate is the strongest indicator of rental prices, its simply supply and demand.

However, please be aware that this study is time specific and focuses on the long term rental market. It is important for long term renters but its not the full story. There are over 20,000 whole properties listed on Airbnb in Sydney ( The trend has been to shift to either ‘sleep’ the property or to shift to the informal market renting on a weekly/monthly basis ready for the tourist rebound. Domestic visitation into the city and beachside suburbs remains quite strong and is being promoted by destination agencies. If tenants are hopefully of permanent change I think they will be disappointed, the data reported elsewhere shows an upward trend in rents and that will also come back to Sydney and Melbourne.

3 years ago

I live in Hunter Valley Wine Country, NSW. Previously, tourist and visitor accommodation was concentrated in Pokolbin, Lovedale and Broke which are the main vineyard areas. In the past couple of years there has been a proliferation of older homes in nearby Cessnock being bought by investors, renovated and offered on Airbnb for short term rental, capitalising on the close proximity to Wine Country At last count there were over 200 homes being used as holiday accommodation in Cessnock and close suburbs which would traditionally have been used as residential premises. That is over 200 families now displaced. There is now a shortage of permanent rental accommodation in these traditionally residential areas and consequently, rents are increasing. For Airbnb to continually deny that they are not a major cause of rental distress and homelessness is absolute rubbish.

Reply to  ANITA
3 years ago

Local Councils, especially those outside the Greater Sydney Region, need autonomy to set a low cap to drive these properties back to the rental market. That is the only tool now available to them.

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