Welcome to an overview of the short-term rental industry in Australia. This article will share valuable insights and opportunities based on comprehensive booking data compiled by PriceLabs.
The growth of the supply
Over the past 18 months, supply has grown significantly across major markets in Australia. Airbnb, in particular, has seen a 25% increase in listings compared to the previous year, totaling 166,000 listings as of June 2023. With these numbers, Australia ranks 10th in the number of listings globally.
Diving into the market breakdown
Let’s dive deeper into the key markets within Australia:
- New South Wales: Leading the way with 56,000 listings, New South Wales benefits from the popularity of Sydney’s inner-city and beachside suburbs.
- Victoria: Coming in second with 45,000 listings, Melbourne plays a significant role in shaping Victoria’s short-term rental market.
- Queensland: Securing the third spot with 34,000 listings, Brisbane and the Gold Coast contribute to the strong presence of short-term rentals in this region.
Check out the video below explaining the insights and opportunities in the Australian Short-term Rental Market.
Property Owners and Managers
When it comes to property ownership and management, there is an exciting dynamic in the Australian market:
- Individual Owners: Around 35% of properties in Australia are single-owner-owned and managed.
- Small Property Managers: Approximately 34% of properties fall under the management of small property management companies or individuals who handle two to ten properties. This represents diverse opportunities for property managers looking to grow their businesses.
Why is Australia a thriving market?
Australia offers a plethora of opportunities for the short-term rental industry. Here are some key factors contributing to its success:
- Geographic attractions: Australia’s diverse and breathtaking landscapes offer travelers various experiences.
- Year-round opportunities: Australia remains an attractive tourist destination with favorable weather conditions throughout the year.
- Cultural and sports events: Australia hosts numerous cultural and sports events, offering exciting entertainment options.
- Infrastructure: Australia boasts excellent infrastructure, making it convenient for travelers to explore the country.
- Upcoming 2032 Olympics: The upcoming Brisbane Olympics further solidify Australia’s bright future in the vacation and short-term rental sectors.
Occupancy rates in 2023
However, the year 2023 has presented some challenges in terms of occupancy rates:
- First Half Comparison: Comparing the first half of 2023 to the previous year, we observed that occupancy rates were 5% lower in the first quarter and 10% lower in the second quarter.
- Increased Supply Impact: It is essential to note that these occupancy rates take into account a 25% increase in supply.
- July Occupancy: The data for July 2023 showed a 34% occupancy rate compared to 2022. While this indicates a slight drop, it is essential to consider that July is still amidst the winter season.
- City-Specific Analysis: Melbourne showed improved occupancy trends compared to 2022 from April to June, whereas Sydney, Brisbane, and Canberra are still struggling to reach the occupancy levels of the previous year.
Looking ahead
Despite the current challenges, there is tremendous potential for the Australian short-term rental market:
- Seasonal Outlook: As we move toward the summer months, we anticipate a better or similar occupancy rate than in 2022.
- Supply Growth: The recent surge in supply indicates a positive long-term outlook for the Australian market.
- Diverse Options for Travelers: Australia’s diverse range of accommodations, from city apartments to beach homes and luxury villas, caters to travelers’ varied tastes and budgets.
- Brisbane Olympics: The upcoming Brisbane Olympics in 2032 will further boost Australia’s tourism and short-term rental industry.
In conclusion, the short-term rental industry in Australia continues to grow, offering vast opportunities for property owners and managers. With its stunning landscapes, cultural events, and upcoming Olympics, there is no doubt that Australia remains a thriving market in the vacation rental industry. Though the current occupancy rates may seem challenging, the long-term prospects for the Australian market are promising. Property owners and managers can position themselves for success in this dynamic industry by leveraging data and insights.
About the Author: Richie Khandelwal co-founded PriceLabs, a revenue management and dynamic pricing solution for the short-term rental industry. With vast experience in the industry, Richie is passionate about helping property owners and managers optimize their revenue and make better business decisions.
