key quantitative and qualitative findings . It will then draw conclusions from the research , including six recommendations for how local government can respond .
AIRBNB ’ S IMPACTS ON HOUSING Airbnb and other forms of STRA such as Stayz or Vrbo , influence change on the housing market by converting private homes into visitor accommodation . There are several ways that STRA has the potential to impact housing affordability :
1 . The conversion of property from longterm rentals to short-term rentals .
2 . The purchase of property for the purpose of renting on the short-term rental market , where it was previously used as a primary residence , either by owner occupiers or long-term tenants .
3 . The conversion of accommodation such as granny flats or spare rooms , from long-term rental accommodation for students , or from forms of typically more affordable accommodation in ‘ share house ’ arrangements , to shortterm rentals .
4 . The commodification of shelter , whereby housing which should primarily be considered shelter is treated as a commodity , with the additional potential use of the property increasing its value .
Additionally , in Australia , current taxation incentives such as capital gains tax discount and the ability to negatively gear holiday homes ( or another nonprimary residence ) encourage the use of a property for STRA .
THE CASE STUDIES Each of the Sydney LGAs studied have formally identified the challenge that Airbnb poses to housing in their LGA . These LGAs have limited vacant land available to increase housing supply and therefore must increase supply through increased density and infill and maximise the use of existing housing for longterm accommodation . This challenge has become more prominent recently as NSW has sought to impose housing targets on councils .
Northern Rivers and the trends during the pandemic for people to relocate ( temporarily or permanently ) to regional Australia . Once dominated by communes and affordable housing , 4 , 5 the Northern Rivers , has become an internationally renowned tourist destination and has become the location of some of the most expensive non-metropolitan housing in Australia .
AIRBNB IMPACT ON HOUSE SALE PRICES This research used data from Inside Airbnb which is an independent and noncommercial open access tool 6 , housing market data was sourced from Core Logic . This data included location data ( suburb , postcode , LGA ), listing prices , listing periods and property features ( number of bedrooms , bathrooms , car space etc .). In both data sets analysis was possible down to the level of individual postcodes , 12 variables in total were included and the data range for analysis was January 2015 to October 2017 .
This research has found , across the NSW LGA case studies , for every $ 1 in price that an Airbnb listing increases by , there is a corresponding $ 853 increase in sale price and $ 0.265 in the cost of weekly rent .
A number of methods were considered in the development of this model and an Instrumental Variable ( IV ) Two Staged Least Squares Regression ( 2SLS ) was selected through an iterative process of testing . This is a model that has frequently been used in housing research , including in research on the impacts of Airbnb . 7 , 8 , 9 , 10
This research has found , across the NSW LGA case studies , for every $ 1 in price that an Airbnb listing increases by , there is a corresponding $ 853 increase in sale price and $ 0.265 in the cost of weekly rent . For a 12-month period this results in an inflation of house sale prices by approximately $ 31,000 and an increase in yearly rent of $ 10 based on the average increase in Airbnb prices . This is observed at high significance levels ( p < 0.01 ) in the regression model which incorporated both the inner city metropolitan LGAs and the non-metropolitan LGAs in the research .
Despite arguments that Airbnb is part of the share economy and beneficial for tourism , this research demonstrates , irrespective of any tourism impacts , Airbnb is detrimental to housing affordability , particularly sale prices , which over a longer period of time would be expected to impact rents .
AIRBNB ’ S IMPACTS ON ECONOMIC DEVELOPMENT Airbnb and Tourism In some areas of Australia there is an undeniable tension between the need for housing and need for additional visitor accommodation . Waverley has identified the need for increased accommodation to support increased overnight visitation with a preference for regulated boutique
The Northern Rivers LGAs are also challenged by housing availability and affordability . These challenges have increased in flood affected areas of the
ECONOMIC DEVELOPMENT JOURNAL VOL 17 NO 2 2024 19