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A recent survey has revealed that Australian renters are among the hardest hit globally by the housing affordability crisis.
A report from software company Capterra analysed over 4,800 tenants across 12 countries, 400 of which resided in Australia, and found that 71 per cent of Australian respondents rent due to being unable to purchase their own home, significantly exceeding the global average of 55 per cent.
Rising rental costs were found to be overwhelmingly impacting the lives of Australian renters, with 48 per cent of tenants identifying affordability as a major issue – well above the global average of 34 per cent.
As a result of these circumstances, 45 per cent of Australian respondents reported dissatisfaction with current rental prices, making the country’s renters the most discontent worldwide, and registering far above the global average of 36 per cent.
Capterra highlighted that tenants’ responses revealed significant challenges around the price increases brought on by the rise in short-term rental properties (STR) over the past decade.
Analyst Andrew Blair from Capterra noted that while the “growth of short-term rental platforms has certainly benefited local economies” and proven to be a “lucrative option for property owners”, he stressed that this trend has “disrupted local housing markets, especially in Australia”.
Notably, over half (57 per cent) of Australian respondents stated that they believe that STR properties create higher prices for long-term rentals, and 42 per cent of tenants reported that STRs have led to significantly increased rental prices in their area.
The survey showed the supply and demand based challenges posed by STRs, with 27 per cent pointing to the limited availability of long-term rentals as a top challenge.
Respondents also reported difficulties around the changing sentiment among property owners, with 27 per cent of tenants highlighting challenges around less flexibility in rental agreements and 24 per cent identifying problems relating to an increased preference for short-term rentals by property owners.
Capterra reported that Australian renters strongly supported limiting the number of STR properties, with 85 per cent agreeing that reducing STRs would help to create a stable and sustainable housing market, and 83 per cent responding in favour of local regulations to limit the proliferation of STRs.
Legislation around STR properties is already being tabled in Victoria, with the state’s recently introduced Short Stay Levy Bill 2024 proposing a 7.5 per cent levy on STR accommodations starting 1 January 2025.
This bill aims to encourage investors to return properties to the long-term rental market, with all revenue generated from the levy directed to Homes Victoria to support the delivery of social housing in the state.
To address the challenges raised in the survey, Blair stressed that “property managers and policymakers must take a data-driven approach to understand the impact of short-term rentals on prices to restore balance in the distribution of short-term and long-term rentals”.
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