Airbnb challenges: is it still worth renting out your place?

WITH Michelle BALTAZAR

Editor-in-Chief • Money magazine

It isn’t surprising that many property owners share their place with travellers: the extra cash helps offset rising living costs and mortgages.

But short-term renting faces headwinds.

“It is tougher for my property now than pre-Covid,” says Isabella, a 68-year-old retiree who has an investment property in the Sydney suburb of Randwick.

The NSW government has cut the days she can rent out her Airbnb from 365 to 180.

Government caps on the number of days, steeper council rates and increased competition from hotels are some of the challenges for hosts.

Some local governments also charge higher council rates.

Some short-term rental markets are saturated as more properties are listed, and fees from portals such as Airbnb have increased for guests.

Then there are the unpopular cleaning fees that an increasing number of Airbnb hosts charge.

Short-term rentals are also being blamed for lack of affordable housing in tourist hotspots and even big cities.

Business starts to pick up

For Airbnb hosts such as Geoffrey, who has two highly rated Airbnbs in Hepburn in regional Victoria, bookings aren’t the same as in pre-pandemic times.

“Bookings are steady but not filling as quickly. Potential guests are now choosing to spend their travel dollars in other ways – be it on cruise ships or in other countries – but we have just started to see the return of the international traveller to our short-stay properties here, so that looks very promising.”

Domestic travel is forecast to return to pre-pandemic levels later this year, while international tourists are expected to reach pre-Covid levels by 2025.

Geoffrey has been renting out his two properties for more than a decade, even before Airbnb set up shop in Australia in 2012.

He uses several platforms, such as Stayz, Vrbo and Expedia, plus Booking.com and Riparide, which cover NSW and Victoria.

He has had more than 2000 bookings over that time.

“Overall, 86% of all my bookings come from Airbnb, so I am a very satisfied Airbnb host.”

Despite reports of partygoers damaging properties, Geoffrey says he can count on one hand the number of problem Airbnb guests.

“But, sadly, it’s not consistently the same with guests who book via Booking.com and the Expedia brands.

“The difference I think is that Airbnb guests genuinely want an interactive experience and so bring a more caring attitude to someone else’s house.”

New wave of hosts Australians feel more comfortable about occasionally sharing their space with strangers who have been vetted and reviewed.

Using your home as a cashbox is leading to a new wave of people considering hosting for the first time, according to research by Airbnb in Australia.

While the typical host on Airbnb in Australia earned $11,464 or more in the pandemic year 2021, the numbers are rising sharply around the globe.

Forty percent say their shortterm rental has helped them stay in their homes and 7% say it has meant they avoided eviction.

Another 41% say they’ve used the extra money to pay for food and other items that have become more expensive.

An income in retirement

Isabella took some money out of super four years ago to fix up her one-bedroom investment property and list it on Airbnb to give her a retirement income.

She did her sums and found that a short-term rental was potentially 40% more lucrative than renting it out for the long term.

Over 2019 and the early part of 2020, Isabella’s good reviews were building.

Her bookings, particularly from people catching up with family members, were solid.

They dried up during Covid, but the location of her apartment near a hospital meant she continued to attract guests who accompany and visit family members in hospital.

Then, in November 2021, the NSW government placed the 180-day cap on short-term rental accommodation, such as Isabella’s, where the host is not present – referred to as unhosted.

Where guests stay on their premises, hosts can rent out their Airbnb for the entire year.

Outside the greater Sydney area, councils in NSW have the power to cut the 365-day limit to no less than 180 days a year.

As well, owners’ corporations in some states can adopt by-laws that limit short-term rentals in their strata scheme, by banning it in lots that are not the host’s principal place of residence.

In NSW, for example, if someone lives in a strata property as their principal place of residence, they will still be able to rent out their home or rooms while they live there, or while they are temporarily away.

Airbnb fights back

Airbnb is busy working with state governments on caps on shortterm rentals, trying to stop radical cuts to the number of days.

To attract hosts, Airbnb is adding sweeteners such as expanded guest identity verification and higher insurance cover, up to $3 million damage protection.

It has improved the set-up for new hosts, linking them to an experienced “super host” for one-on-one guidance, and added new categories such as “play” for homes with basketball courts, game rooms and water slides, as well as wheelchair access.

In a recent presentation, Brian Chesky, one of the founders of Airbnb, said its hosts in 2023 will face more pressures, such as the resurgence of hotels, as well as a more price-sensitive market.

But hosts can take heart that Australia continues to be on travellers’ hit lists as a go-to destination, with Sydney, Melbourne and Perth appearing in the top trending travel spots for 2023 international travel.

SUSAN HELY (Airbnb host and user)

The fallout from a spate of natural disasters and rising inflation is helping to drive up the cost of home and contents insurance, with nearly two-thirds of homeowners reporting an increase in premiums over the past year.

That’s according to a survey conducted by comparison website Finder, which found that 63% of respondents had seen the cost of their insurance rise during 2022, compared with 22% of people who hadn’t faced an increase and 14% who were unaware of any change.

Despite the hikes, just 11% of those surveyed said they had changed insurers even though, notes Finder insurance expert James Martin, switching can secure a better deal.

“The best deals are typically offered to new customers when they sign up online,” he says.

“Insurers often offer discounts of up to 30% for new customers, so it absolutely pays to shop around each year.

“You can also call your insurer and ask them to pricematch or give you the best possible deal.

“It doesn’t always work, but it’s worth a shot – they’ll often do what they can to keep your business.”

TOM WATSON

The Central Coast health workforce has been boosted with 123 new graduate nurses and midwives beginning their careers at Gosford and Wyong hospitals this year.

Parliamentary Secretary for the Central Coast Adam Crouch said they are among a record 3,600 nurses and midwives set to commence working across 130 NSW public hospitals and health services.

“The work that nurses and midwives do is at the very heart of the public health system, caring for people in our hospitals, at home and in our communities,” Crouch said.

“The commitment, compassion and skills they bring to the role make a huge

123 New Nurses And Midwives

difference and contribute greatly to the health and wellbeing of the people across our region.

“I am incredibly pleased to welcome the new recruits to the Central Coast Health District and know that they will make a big difference to the health and wellbeing of our community.”

Minister for Regional Health Bronnie Taylor said more than a third of the record number of graduates beginning their careers with NSW Health have chosen to work in rural and regional hospitals.

“It is so wonderful to see so many nurses and midwives either choosing to move to the bush or returning home so they can care for their communities,” Taylor said.

“As someone who spent the best part of their nursing career at a regional hospital, I know the skills and experience these new nurses will gain will set them up for success into their future nursing career.

“On behalf of our regional communities, I am thrilled to welcome this next generation of nurses and midwives and wish all our new starters the very best of luck as they embark on their new career.”

The latest statewide intake of graduate nurses and midwives is an 18 per cent increase on last year and the largest intake of any state or territory in Australia.

Source: Media release, Feb 14 Parliamentary Secretary for the

New COVID boosters available this month

New COVID-19 booster shots will be available for adults from February 20.

People will be eligible for a booster shot if they are over 18 and haven’t had COVID-19 or a booster shot in the past six months (from August 20, 2022).

Member for Robertson Gordon Reid said adults eligible or at risk of severe illness should consider getting the booster.