‘It’s turned Sydney into one giant resort’: City of Sydney to debate Airbnb cap

The City of Sydney will be asked to consider imposing a 60-day cap on short-term rentals in an effort to return possibly thousands of homes to the long-term rental market, but not everyone is convinced a cap will work.

Greens councillor Matthew Thompson wants Sydney to follow Byron Shire Council’s lead, after it introduced a 60-day cap last year. Like Byron, the cap would apply only to non-hosted stays, meaning entire vacant properties listed as short-term rentals, rather than those who live in the property but rent out a room or granny flat.

A review of Sydney’s short-term rentals in 2023 found that more than 5000 properties were registered in the Sydney council area. Data from Airbnb tracker Inside Airbnb shows 3700 properties listed on the platform, 83 per cent of which are entire homes or apartments.

Home owners and renters in Millers Point say their community is dwindling as streets become littered with lockboxes, the tell-tale sign of short-term rentals. One in three homes in Millers Point were empty at the last census, and locals anecdotally report streets where more than half of the homes are listed on short-term rental platforms.

Home owner Melanie Tait said after COVID, when borders opened and rents started to increase, many of her neighbours discovered they could make far more money from short-term rental platforms than by renting to a local family.

“A lot of tenants were getting served their notice, then two weeks later a furniture truck would arrive, the place would be furnished, and it would be listed on Airbnb,” Tait said.

“It’s turned Sydney into one giant resort. The housing for workers has dried up, it’s disappeared, and everywhere has become a hotel room.”

Short-term rentals in Sydney are a big business – plenty of those in Millers Point will rake in more than $1000 in a single weekend, making them profitable for investors even if they sit empty multiple days a week.

“Right now, there are thousands of homes in the City of Sydney that are sitting empty in the middle of a housing crisis,” Thompson said.

“And in the middle of a housing crisis, when rents have never been higher and the vacancy rate never lower, every house should be a home, not an expensive holiday rental.”

Thompson argues a cap would act as an incentive to landlords to put their properties back on the long-term rental market, but not everyone is convinced.

Another City of Sydney councillor, deputy lord mayor Jess Miller, said a cap would be too hard to enforce to be effective, and feared it would be too easy for hosts to find loopholes.

Instead, Miller wants a ban on new un-hosted short-term rentals until vacancy rates climb to at least 2.5 per cent.

Airbnb has done its own research into caps – a YouGov survey of 3000 hosts commissioned by the platform found 88 per cent would not put their property on the long-term rental market even if caps were introduced or lowered. One of the common reasons was that owners wanted to be able to use the home at certain times of the year and still earn income from it when they aren’t staying there.

When asked if a 60-day cap was supported by the state government, Planning Minister Paul Scully said the best way to reduce short-term rentals is to build more hotels and high-quality accommodation.

Thompson will bring forward the motion at the next council meeting on October 27.