Airbnb is meeting a “missing sector” in Wagga’s rental market that goes against property research from the metros and coastal suburbs.
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While Airbnb is putting pressure on housing affordability and the rental market in popular holiday destinations, it is meeting a particular sector in the local market.
Wagga’s independent property valuer Chris Egan said Airbnb, the online marketplace that allows owners to rent out their homes, should be encouraged more in Wagga.
“The rental market in Wagga mainly consists of non-furbished homes with extended leases, but with the Airbnb market it’s usually small, furnished, trendy and central units, semis and houses,” he said.
“We have a high transient population from defence and the university and many people who are coming here to stay are needing a place that is suitable longer than motels, but not long enough for a 12 month lease and they usually don’t have the money to furnish an entire place.
“That’s the beauty of Airbnb and it is meeting a missing sector in the residential market.”
Mr Egan said the online marketplace is not having a negative effect on the regional market at all.
“This is an upper market and if investors are savvy, they can utilise this particular market,” he said.
“This is a sector that needs to be embellished because we need professionals to come to regional areas and be able to cater for a type of leasing that suits those who want short to medium to long stays.”
RiskWise property research CEO Doron Peleg said Airbnb can help absorb an over-supplied rental market but it can also increase house prices.
In the metropolitan markets, like inner-city Melbourne, Mr Peleg said that Airbnb had proved a “lifeline” for investors unable to find tenants in an over-supplied rental market.
However, at popular holiday destinations such as Byron Bay it had helped force long-term tenants out of the market and increased property prices.
“In areas such as these, and particularly in beachside suburbs, we see the overall demand for properties by investors and owner-occupiers going up,” he said.
“Investors know they can use the property for Airbnb and many put in place leasing contracts that only last 10 months, so they are vacant during summer for the holiday-makers, and this supports the demand for properties.
“So, when home buyers try to enter the market they are faced with competition from investors which obviously drives prices up.”
Mr Peleg said limiting Airbnb to certain areas would help balance the market.
“In an ideal world, Airbnb would only be allowed in certain areas based on demographic, supply of properties and other considerations such as housing affordability and supporting the local economy,” he said.