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International approach to STRA offers a roadmap

Rising concern internationally about the impact of STRA on house prices and rental costs has translated to strong restrictions, particularly in Europe and North America.

By contrast, the Australian states and territories have been relatively slow to respond, and local governments lack reliable data to monitor and enforce compliance with existing regulations.

Measures used internationally include:

• strong registration and reporting requirements
• limitations on the number of booking nights or locations where STRA can operate
• imposing taxes or levies
• strengthening protections for long-term renters.

These measures could be further developed in Australia.

Host motives go beyond higher returns

STRA owners and hosts are not necessarily motivated by higher rental returns.

Changes to residential mobility and hybrid or remote work have increased demand for second residences, and many providers are motivated to recover costs associated with maintaining a second home.

Other motivations include responding to demand for flexible or temporary housing and navigating regulatory or tenancy challenges in the long-term rental sector.

Understanding motivations and financial considerations is important when designing policies to limit or reverse the conversion of long-term rental properties to STRA.

Build regulation on best practice

Leading practice in STRA policy internationally and domestically emphasises the importance of:

• clear, reliable and timely data to monitor STRA activity and market impacts
• enforcing existing regulations through platform reporting, user-based registration and compliance mechanisms
• protecting long-term rental housing supply and the rights of renters by restricting the conversion of long-term homes to STRA
• spatial policies recognising key tourism locations that may be appropriate for unrestricted STRA
• financial tools, such as fees, rates, or levies to fund the infrastructure and services associated with short-term visitors.

Adopt an all-of-government response

Local governments in high-demand areas need support in developing and implementing policy responses that limit conversion of permanent accommodation to STRA, protect long-term renters from displacement, and offset the housing market and infrastructure impacts of high visitor demand.

All levels of government have a role to play. The Federal Government can reduce rental market impacts of the STRA sector through national housing policy, taxation and housing assistance. State and territory governments can support STRA registration, land use regulations and renter protections, while enabling local governments to respond to specific community and housing market impacts.

Facilitate STRA use as emergency housing

There is a strategic opportunity to use the short-term housing sector as emergency housing in response to crisis events and demand shocks.

This will require coordination and resourcing, as well as collaboration across short- and long-term rental housing providers, social landlords and the emergency sector.

Develop support programs

States can support local councils and housing providers by establishing programs to support property owners wishing to transition from STRA and/or to make properties available as temporary or crisis accommodation.

Retain levies for local purposes

Resources collected through financial levies on STRA should usually be spent in the local area to help alleviate housing and infrastructure pressures created by short term visitors.

Compel platforms to share data

Government leadership is needed to ensure platforms supply the detailed and timely property-level data needed to enforce regulations and monitor impacts.

The project used mixed methods to examine the spread of STRA across Australia, as well as provider types and business models. It also considered impacts on housing markets and communities, and potential regulatory responses.

The research involved an international policy review, development of a national typology of STRA models, financial analysis, and analysis of spatial distribution. Case studies examining STRA and intersections with housing markets in Greater Sydney, the NSW South Coast and Tasmania were undertaken, along with interviews with STRA managers and providers, local government and other stakeholders.