New data has revealed the growing number of short-term holiday let listings in Australia’s regions, with some regions recording more than a 40 per cent increase over the past two years.
The data, provided by short-term rental data and analytics company AirDNA, shows that Rockhampton, in Queensland, recorded the greatest increase in short-term rental listings over the two year period to May 2021 at 59.8 per cent. Mid-western regional NSW, which incorporates the town of Mudgee and Orange, recorded a 41.4 per cent increase. Maitland and Singleton, in the Hunter, also appeared in the top ten list of increased short-term rentals.
AirDNA’s data covers listing numbers on popular short-term rental platform Airbnb as well as Expedia Group’s VRBO (vacation rental by owner) sites.
The growth in regional listings was in line with a global trend that emerged during the COVID-19 pandemic, according to the firm, a period when Australia’s larger city markets recorded a decrease in holiday listings.
During the same period, Sydney listings fell by 41.4 per cent, Melbourne by 28.3 per cent and the Gold Coast by 27.3 per cent.
The figures correspond with agent reports that a growing number of investors in Mudgee are purchasing property with the intention of leasing it on online platforms like Airbnb or Stayz.
Listing agent Andrew Blackman of First National Real Estate Mudgee said that there had been a distinct rise in investors buying for the purpose of listing on Airbnb in the past year.
He said listings such as the one he was currently advertising at 96 Gladstone Street, two streets away from the town’s centre, were typical of the stock being sought after for short-term listings.
“Particularly our CBD market everything within three or four block radius of Mudgee there’s been a very strong demand from out of town buyers. Our visitors have been coming and they’ve not been able to find somewhere to stay, and they see how much it costs to stay. They see how much they could make,” he said.
The demand from out of town investors as well as tree changers during COVID-19 had helped contribute to strong price growth in the area.
“House prices in our whole area are going through a very strong growth phase now on the back of Covid. It [the pandemic] has been very good for us from in that people have wanted to travel domestically. We’ve picked up a lot more city traffic than we ever did,” he said.
Price growth had been particularly evident in the cheaper end of the inner-city market, the housing stock that is popular with those seeking a weekender.
“On your cheaper properties there’s been massive growth. Little cottages that we’d see in the 300s are selling close to 600s in that timeframe,” he said.
The price growth had been less pronounced in the outskirts of town and Mr Blackman didn’t believe the growth in short-term rentals would affect the overall affordability of the town.
“Your first home buyers don’t buy in those [central] areas, they prefer to be further away from the CBD. We’ve seen growth in those outer markets but not at the same level as we’ve seen in the CBD and I still believe that with interest rates being at the lowest they have been, I don’t think housing has ever been more affordable,” he said.
McGrath Central Tablelands agent Adam Sutherland said that prices were a key factor in the region’s popularity with investors.
“What we’re finding is that there’s a lot of people from metro areas who want to invest in the area firstly because it’s a cheaper market rather than reinvesting in Sydney but also as an Airbnb option it gives them the option to come to the region and enjoy their own slice of the Mudgee lifestyle,” he said.
He’s currently advertising a property with forward Airbnb bookings already in place at 54 Cox Street and said that enquiry from out of town buyers had been strong.
The property is fully-renovated and has been used as an Airbnb rental for the past four months or so.
The holiday-letting phenomenon is also being felt in areas like Gerringong, on the NSW south coast.
AirDNA includes the town in the statistical area of the City of Kiama, which recorded a 23.3 per cent increase in listings over the two year period.
Kate Morgan of Ray White Gerringong said that there had been a “definite” increase in the number of out of town investors during the pandemic.
“Mainly Sydney buyers but also from across the state, they are finding the place they want to use as a holiday home but also getting some income as well [by leasing on platforms like Airbnb]… If someone else can help pay the bills why not?,” she said.
This type of buyer was particularly keen on properties that are both accessible to town and “close to the water,” such as the one she currently has advertised at 58 Headland Drive in Gerroa.
The combination of holiday house investors and sea changers had led to dramatic price increases in the area since the first half of 2020.
“Prices in Werri Beach [a four-minute drive from Gerringong] basically doubled in price during that period,” Ms Morgan said.
Source: Jack Needham, Mudgee Guardian, 9 July 2021