Fewer long-term rental listings available and a 7 percent increase in weekly rent—that’s the outcome of an attempt to make more accommodation available for locals by limiting owners of short-term accommodation to renting to tourists and visitors for a maximum of 60 days a year, according to research carried out for Airbnb.
The Byron Shire placed the cap on non-hosted short-term rental accommodation (STRA) in September 2024, in a bid to reduce prices for locals competing with holiday-makers.
But it hasn’t worked, says Frontier Economics. Instead, rental prices have risen to their highest ever levels, increasing from an average of $1,112 to $1,193 a week over the past year. By comparison, Sydney’s median house rent is $780 a week.
The council was given permission by the NSW Labor government to impose the restriction in 2023 after local Greens MP Tamara Smith lobbied the state’s Independent Planning Commission.
Airbnb, whose business model relies on hosts opening their homes to travellers, says a year on from the experiment, there are also fewer long-term rental listings available.
“Targeting short-term rentals is not a silver bullet to deal with the housing challenges in Byron Bay,” the firm’s Australia and New Zealand manager, Susan Wheeldon, said. “[It] distracts from the real need to build more homes.”
She claims the council is relying on “inflated data” to argue that short-term rentals are swamping the rental market and driving up prices.
The council says around 35 percent of local rentals are dedicated to the short-term rental market, while the San Francisco-based accommodation intermediary says the true figure is more like 11 percent.
Relying on government data, Airbnb noted there were 1,004 registered non-hosted short-term rental properties in the Byron Shire.
A search of its website by The Epoch Times, looking for a week-long stay in an entire home (as opposed to a room) in March of 2026, resulted in well over 1,000 homes being displayed.
But a search on Inside Airbnb, a rental watchdog group, says there are 1,943 “entire home” listings in the Byron Shire area.
“The housing crisis in our region was a slow build over a decade where we’ve seen gentrification in Byron Bay,” Smith said, adding that one year wasn’t enough for any tangible results to be seen in terms of fixing soaring prices.
“These are residentially zoned areas and they need to be for residents,” the Greens MP said, denying it was a housing supply issue and calling the suggestion a “complete farce.”
“Supply alone is not going to fix it because there is no deterrent to stop developers from turning properties into short-term rental accommodation,” she said.
“If we didn’t have this cap, then whole areas could all become like the Truman Show—just 100 percent short-term rental accommodation.”
AAP contributed to this story.
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