Victoria’s Airbnb market is increasingly dominated by property investors who purchase multiple homes in popular tourist towns, leasing them to short-term holidaymakers. This trend is significantly depleting the rental stock available for local residents, exacerbating the housing affordability crisis in regions like Bass Coast and the Mornington Peninsula, according to a recent report.
The report, which analyzed four years of Airbnb listings data, highlights a shift from Airbnb’s original “sharing economy” model—where travelers stayed with homeowners or at owner-occupied properties—to a more commercialized approach. Currently, most Airbnb listings are owned by landlords who manage multiple properties, often outsourcing their management to third parties.
Impact on Housing Affordability
This shift is critical as the rise in non-hosted short-term rentals on Airbnb is removing thousands of potential long-term rental homes from the market. In 2019, 55% of short-stay residential properties listed on Airbnb across Australia were hosted by a resident. By 2023, this figure had fallen to 42%, with 58% of properties not hosted.
“There are now more listings for entire homes than for hosted rentals, which is a shift away from the original premise of platforms like Airbnb for property owners to host visitors in spare rooms,” said Dr. Michaela Lang, a research fellow at Monash University.
Dr. Lang, the lead author of a report by the Australian Housing and Urban Research Institute, described Airbnb’s transformation from a platform of hosts to “ghosts.” Between 2019 and 2023, the number of hosted homes on Airbnb decreased by 32%, from 73,000 to 50,000, while non-hosted properties increased by 15%, from 60,000 to 69,000.
Regional Disparities
The trend is particularly pronounced in coastal Victoria. On the Mornington Peninsula, the number of non-hosted properties surged by 28%, from approximately 2,500 in 2019 to 3,300 in 2023, establishing the area as Australia’s Airbnb heartland. Similarly, Bass Coast Shire, including the popular tourist destination Phillip Island, experienced a 30% increase in the same period.
Conversely, listings in central Melbourne have significantly declined, from 2,600 in 2019 to less than 2,000 in 2023. This pattern mirrors national trends, with cities like Sydney and Brisbane also seeing drops, while holiday destinations such as the Whitsundays, Noosa, and the Barossa Valley witness an uptick in non-hosted listings.
Economic and Social Implications
While short-stay rentals have long existed in these areas, Airbnb’s dominance coincides with a worsening housing shortage. Dr. Lang noted, “For some of these towns, housing has just become incredibly unaffordable and unavailable. Tourists can be great for your business, but some areas are reaching densities where it’s difficult to get staff because it’s so hard to find housing.”
Mornington Peninsula Shire Mayor Anthony Marsh remarked on the transformation of the holiday rental landscape, where modest beach houses are now lucrative short-term rentals. “We get 8 million visitors a year, so there is, to some extent, a reliance on these holiday rentals. But Airbnb has changed it from the little shack that people might rent out in Blairgowrie over a couple of weeks to what’s very much this commercial business model now,” he said.
“If you look at some of the houses on Airbnb in places like Rye, they’re probably reasonably normal beach houses making an absolute killing during the week. If they were on the rental market, they’d likely be considered affordable, and that’s where it’s doing the biggest damage,” Marsh added.
Government Response and Future Outlook
In response to these challenges, the Victorian government introduced a 7.5% levy on short-stay accommodation bookings starting January 1. The measure aims to incentivize property owners to offer more long-term rental options.
As the debate over short-term rentals continues, stakeholders are closely monitoring the impact of regulatory measures and market dynamics on housing availability and affordability. The evolving landscape of Airbnb and similar platforms remains a critical issue for policymakers and communities striving to balance tourism benefits with sustainable housing solutions.
