New research led by the Sydney School of Architecture, Design and Planning finds Australia’s booming short-term rental sector is worsening housing shortages in tourist hotspots, with experts calling for smarter regulation to protect long-term rental supply.

Australia’s short-term rental accommodation sector has grown by more than 10 per cent in just two years, intensifying pressure on housing affordability in tourist hotspots and major cities, according to new research from the University of Sydney.

Led by Professor Nicole Gurran from the School of Architecture, Design and Planning, and conducted for the Australian Housing and Urban Research Institute (AHURI), the national study found there were 174,558 short-term rental listings across Australia by the end of 2024. Most listed entire homes rather than hosted rooms. Researchers say the findings highlight the need for more sophisticated and targeted regulation of the sector.

Professor Gurran said effective policy responses depended on understanding how the sector operates, who uses it and why owners choose short-term rentals over long-term leasing.

“In Hobart, for instance, whole-property short-term rentals outnumbered long-term rental vacancies by 36 to one in December 2024. On the NSW South Coast, there were more than 25 short-term rental properties for every available long-term rental in Shoalhaven.”

The research also revealed the sector is increasingly dominated by professional operators. While 43 percent of Airbnb listings in 2023 belonged to single-property hosts, almost 100,000 listings were controlled by fewer than 20,000 entities.

The study examined the scale and geographic distribution of short-term rental accommodation across Australia, including listing types, market trends and business models. Researchers analysed impacts on local housing markets and communities, alongside potential regulatory responses in metropolitan and regional settings. The project included an international review of policy approaches, housing market case studies in Sydney, the NSW South Coast and Tasmania, and interviews with short-term rental operators and local government representatives.

Researchers found motivations for offering short-term rentals varied across regions.

“Metropolitan owners were often motivated by higher returns, but many regional property owners used short-term rentals to offset the costs of a second home or maintain flexibility for personal use,” Professor Gurran said.

“Restricting short-term rentals alone may not necessarily return properties to the long-term rental market.”

The study also found short-term accommodation plays a broader role beyond tourism, including housing students, project workers, hospital visitors and people displaced by natural disasters.

“Demand for short-term rentals surged following disasters, suggesting the sector can provide important social and economic benefits during emergencies,” Professor Gurran said.

“But there are currently no consistent systems enabling emergency services or local providers to efficiently access short-term accommodation when communities need it most.”

The report also examined recent regulatory reforms across NSW, Tasmania, Victoria and Western Australia, as well as international approaches in Europe and North America.

“Tasmania has led the way in requiring platforms to share detailed listings data. While not a case study region, Byron Shire has introduced planning controls that permit short-term rentals in key tourist zones while capping the use of residential homes elsewhere at 60 nights per year.” Said Professor Gurran.

“Internationally, cities such as Amsterdam have imposed strict limits on short-term rentals to protect permanent housing stock, while New York City now enforces its restrictions by making platforms accountable for the listings they advertise.”

Researchers identified several measures needed for effective regulation, including:

• stronger data-sharing requirements for platforms 

• mandatory registration of and enforcement mechanisms 

• protections for long-term rental supply 

• levies or taxes to help fund local infrastructure and services 

• policies tailored to local housing and tourism conditions

Professor Gurran said all levels of government had a role to play.

“Local governments need the ability to respond to the specific impacts in their communities.”