The debate surrounding short-term rentals resurfaces periodically, with policymakers often pointing to platforms like Airbnb as a potential cause of the housing shortage. The hope is that imposing stricter regulations will free up more homes for long-term renters. However, a recent survey has brought to light some surprising findings: the vast majority of short-term rental hosts have no intention of transitioning their properties to the traditional rental market, regardless of government action.

A YouGov study commissioned by Airbnb found that 88% of hosts would not consider offering their properties for long-term rental, even if new regulations were introduced. In fact, nearly half of the respondents stated they would rather leave their homes vacant than convert them into long-term rentals.

While one could argue that this survey may carry some bias, the results contradict the expectations of policymakers who have been pushing for this shift.

Reasons Hosts Won’t Make the Switch

The survey uncovered that two-thirds of hosts believe their properties are simply unsuitable for long-term leasing. This is understandable upon further examination, as many of these homes serve specific purposes, such as:

• Holiday homes used part-time by the owners
  
• Secondary residences that do not fit the traditional “tenant” model
  
• Properties where the owner lives part-time
  
• Homes located in areas better suited for short stays than long-term rentals
  

Even the introduction of stricter measures, such as night caps (limits on the number of days a property can be rented per year), has done little to alter hosts’ attitudes.

The Impact of Victoria’s Short-Stay Levy

To understand the potential effects of regulatory changes, we can look at Victoria, which implemented a 7.5% levy on short-term rentals in early 2025. Early reports indicate that the levy has had little effect on the broader rental market:

• Melbourne’s rental vacancy rate remains at a critically low 1.8%
  
• Rents in Melbourne have increased by 2.8% over the past year
  
• No evidence has emerged that properties have returned to the long-term rental pool 

The Growing Short-Term Rental Market

If anything, short-term rentals are expanding rapidly. According to a report from the University of Canberra, the number of short-term rental listings in 2023 was approximately 134,000, a 22.8% increase from the previous year. By 2025, this number had surged to 170,000 listings, marking another 26.7% increase.

Critics argue that this growth exacerbates housing affordability issues, particularly in popular areas such as the Gold Coast, Sunshine Coast, and Whitsundays, where low vacancy rates and rising rents are already problematic.

However, the short-term rental industry counters that even at these levels, short-term rentals represent less than 2% of the total housing stock nationwide. While this is accurate on a national scale, it is important to note that in certain local markets, short-term rentals make up a much larger portion of the housing supply, leading to significant distortions in those rental markets.

What This Means for Property Investors

Several key takeaways can be gleaned from these findings:

1. Demand pressures will persist. Australia’s rental vacancy rates remain historically low, immigration is strong, and the supply of new housing is lagging. These factors will continue to drive upward pressure on rental prices.
   
2. Short-term rentals will remain appealing in specific markets. Regions like Queensland, with less stringent regulations, higher yields, and strong tourism demand, will continue to attract investors. However, this market is not without political risks, as calls for regulation are likely to intensify.
   
3. Short-term rental regulations won’t resolve the rental crisis. While regulations may have some effect, they are unlikely to make a significant impact on the availability of long-term rental properties. At best, they will address only a small portion of the issue; at worst, they will increase costs for hosts and reduce tourism revenue without contributing additional properties to the long-term rental pool.
   

Conclusion

It is easy for governments to search for quick fixes, and short-term rentals present an appealing target. However, data suggests that cracking down on platforms like Airbnb will not free up thousands of rental properties overnight.

The real solution lies in addressing the fundamental shortage of housing by building more homes. Until this issue is resolved, both renters and policymakers may continue to search for scapegoats. Investors, on the other hand, should focus on the broader landscape: a market where demand is high, supply is limited, and well-located properties—whether used for short-term or long-term rentals—are becoming increasingly valuable.