Airbnb impacts in the South West

With the rise of Airbnb use in the region, there are a number of potential impacts to tourism and housing affordability which may surface as the online service continues to gain popularity.

In tourism, a recent report by Bankwest Curtin Economics Centre showed that the number of West Australians opening their homes as Airbnb hosts had increased more than 50 per cent in the last year.

There were now 8100 listings in WA with 190 of those properties in Busselton and 295 listings in Margaret River, according to Vasse MP Libby Mettam

The report, The Impact of Airbnb on WA’s Tourism Industry, examined the growth and impact of Airbnb in WA, where tourism was increasingly considered an alternative development in the state’s slowing, resource-dependent economy. 

Professor Pforr said in the South West popular hot spots included Busselton and Margaret River, with monthly earnings across WA generating $4.5 million per month.

Co-investigator Dr Michael Volgger said Airbnb guests differed from traditional WA visitors on some features, including the locations they were visiting from, who they travelled with and where they visited while here.

“According to our data, tourists from Singapore and Malaysia accounted for almost half of all Airbnb users in WA in 2015,” he said.

“Airbnb guests also have an above average tendency to visit wine regions and they tend to be younger and travel more frequently as couples, families or together with friends and relatives.” 

Local laws

Before people list their house for use as short stay accommodation on Airbnb, there were risks and penalties people should be aware of.  

City of Busselton director of planning and development services Paul Needham said renting out a residential property for short stay purposes constituted use of the property as a holiday home.

“Holiday homes require approval from the city. That applies in exactly the same way to those marketed online and those marketed in more traditional ways,” he said.

“Penalties could be applied under both the city’s town planning scheme and the city’s holiday homes local law. 

“The court, in one instance, imposed a $10,000 fine, plus costs, in the case of a property owner who continued to operate without approval, despite repeated attempts by the city seeking to resolve the issues without recourse to the courts.”

Mr Needham said there were currently around 700 approved holiday homes in the city which had risen steadily over the last four or so years since the current regulatory regime was first put in place. 

“There were also a number operating without the necessary approvals, and the city undertakes regular audits and compliance action to identify and address those situations when they arise,” he said. 

“Holiday homes are not a new phenomenon in the City of Busselton, and have been part of the accommodation mix here for decades.”

“What is perhaps most significantly different since the emergence of Airbnb and some other internationally recognised online platforms, is that holiday homes are now something that is increasingly understood in international markets, rather than being mostly focused on the domestic tourism market.”

Housing affordability

In other popular areas of Australia and Europe, landlords who use their investment property on Airbnb to lease as short stay accommodation rather than long term tenancy has impacted on housing affordability.

Reiwa president Hayden Groves said the impact of AirBnB on housing affordability in WA had not hit as hard as it had on the East Coast and popular European cities.

In places like Busselton, Mr Groves said it could impact housing affordability once the market started to pick up and we could see a housing shortage.

“That’s because landlords could get a much better return from doing short term holiday leasing,” he said.

With AirBnB, Mr Groves said it pushed out long term tenants and made it harder because property owners were looking to maximise their return on investment.

“If it does happen anywhere it will happen down south, because over the last 10 years there has been very little to no property price growth,” he said.

“It is not a problem at the moment because rents are affordable and property values are more affordable than they were 10 years ago.

“It could change very quickly should the economy improve and people start spending more money and taking more holidays then suddenly we could find ourselves with a shortage of long term leasing.

“When that occurs it will push up long term lease rents in a significant way.”

Private holiday home market

JMW Real Estate principal Joe White said in Busselton and Dunsborough there had always been a high number of private holiday homes available.

“It is a classic case of, the market is sorting this out, ,the people who would be hurting are the tourist operators, even then I am not convinced how much,” he said.

Mr White said holiday accommodation available on Airbnb was the cheapest accommodation available, so it was bringing in new competitive and affordable holiday accommodation to an area that was not there before.

“I would say it is attracting people who were not attracted before because it is basically cheaper,” he said.

“Technology is the purveyor of influence of our time and it has an overarching impact over everything from regulations, customary practice or the historic way of how things were done.

“The bottom line is that it just cuts through all that and is a new way of connecting a person who wants to stay to a person who has some spare rooms.

“It is proving to be a good residual income for a lot of owners and cheaper accommodation for people who otherwise would not have been able to come.”

Future of Airbnb

Shadow tourism minister Libby Mettam said the reality was Airbnb was here to stay, while it did represent some challenges for the tourism sector it also provided additional income source for local communities and offered accommodation options in gaps in the tourism market.

Ms Mettam said the issue sat where multiple wholesale Airbnb apartments were competing alongside genuine hotels, motels, or other tourism accommodation providers.

“These providers have undertaken a significant series of regulatory hurdles before being able to provide a service to tourists,” she said.

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