Melbourne landlords return to long-term rentals as Airbnb loses its shine
JIM MALOREPORTER JUN 1, 2018
The Airbnb gold rush appears to be ending, with fed-up landlords returning to the long term rental market after the short term becomes more trouble than it’s worth, agents say.
Difficult and hands-on management, less-than-ideal profits, and a saturated market were turning investors from the one-time disrupter, which was no longer seen as easy money.
Talia Besser got her start in the real estate industry managing two Airbnbs for her father two years ago. It initially seemed like a fun venture, but the reality quickly became apparent.
A map showing the tens of thousands of Airbnbs in Melbourne, from Inside Airbnb. Photo: Inside Airbnb
“I think the first two to three months I found it fun,” she said. “Unless you’re going to do it full time and you have all the time in the world, it’s not worthwhile.”
The two units required near-daily attention, from booking cleaners to ensuring the keys were ready to be picked up. But for long stretches of time, the Balaclava short-term stays didn’t attract visitors.
“There are those periods in winter where people weren’t coming to Melbourne, and we’d have them empty for weeks at a time,” she said.
The Privy Council ruling may impact how Airbnb can operate in Australia. Photo: Alamy
At the time, Ms Besser, now a sales agent, was working a full time job and managing the units on the side. She handed the reins back to her father after nine months, because she felt the time and effort she put in wasn’t worth it.
She said after managing it for a while longer, her father crunched the numbers and decided it would be more profitable and less hassle to lease the units fully furnished.
And in the CBD and inner ring suburbs like Carlton, Fitzroy and South Melbourne, agents have also noted the same trend.
While the most recent data from Inside Airbnb shows an 18 per cent increase in listings for entire homes on Airbnb from the end of 2016 to early 2017, the general sentiment within the industry is there is never a shortage of aspirational buyers, who are still won over by the high rents and apparently easy income.
Frank Callaghan Jnr from Frank Gordon in Port Melbourne said alternative, hands-off options were still popular.
“When [Airbnb] first came out people thought ‘oh I can make so much money every night’ but it’s just not realistic,” he said.
Harcourts Melbourne City director Dionne Wilson said interest in Airbnb was still present.
“Buyers are still interested in buying in that capacity, but very early in the set-up they find it was more than they were expecting,” she said.
At the peak of the boom, the disrupter was a zeitgeist among buyers but many have now come back to the rental books.
“A lot of the properties we were selling we had people buying them to turn them into Airbnbs,” she said. “We were losing a few [rental] managements to Airbnb but a lot have since come back to us.”
Ms Besser said more Airbnb users tended to drop out of the market during the seasonal downturn, but couldn’t say if they’d be tempted to come back during warmer weather.
“I know my family won’t do it again, but it’s not to say others wouldn’t return to it,” she said.
Tracking the exact trends in the market was difficult, University of Sydney researcher Professor Nicole Gurran said.
The research focus was on the effect on the property market, and how long-term renters had been affected.
“At the moment we don’t want international tourists competing with low income people and workers in the housing market,” she said.
https://www.domain.com.au/news/melb...ls-as-airbnb-loses-its-shine-20180601-h10t5p/
JIM MALOREPORTER JUN 1, 2018
The Airbnb gold rush appears to be ending, with fed-up landlords returning to the long term rental market after the short term becomes more trouble than it’s worth, agents say.
Difficult and hands-on management, less-than-ideal profits, and a saturated market were turning investors from the one-time disrupter, which was no longer seen as easy money.
Talia Besser got her start in the real estate industry managing two Airbnbs for her father two years ago. It initially seemed like a fun venture, but the reality quickly became apparent.
“I think the first two to three months I found it fun,” she said. “Unless you’re going to do it full time and you have all the time in the world, it’s not worthwhile.”
The two units required near-daily attention, from booking cleaners to ensuring the keys were ready to be picked up. But for long stretches of time, the Balaclava short-term stays didn’t attract visitors.
“There are those periods in winter where people weren’t coming to Melbourne, and we’d have them empty for weeks at a time,” she said.
At the time, Ms Besser, now a sales agent, was working a full time job and managing the units on the side. She handed the reins back to her father after nine months, because she felt the time and effort she put in wasn’t worth it.
She said after managing it for a while longer, her father crunched the numbers and decided it would be more profitable and less hassle to lease the units fully furnished.
And in the CBD and inner ring suburbs like Carlton, Fitzroy and South Melbourne, agents have also noted the same trend.
While the most recent data from Inside Airbnb shows an 18 per cent increase in listings for entire homes on Airbnb from the end of 2016 to early 2017, the general sentiment within the industry is there is never a shortage of aspirational buyers, who are still won over by the high rents and apparently easy income.
Frank Callaghan Jnr from Frank Gordon in Port Melbourne said alternative, hands-off options were still popular.
“When [Airbnb] first came out people thought ‘oh I can make so much money every night’ but it’s just not realistic,” he said.
Harcourts Melbourne City director Dionne Wilson said interest in Airbnb was still present.
“Buyers are still interested in buying in that capacity, but very early in the set-up they find it was more than they were expecting,” she said.
At the peak of the boom, the disrupter was a zeitgeist among buyers but many have now come back to the rental books.
“A lot of the properties we were selling we had people buying them to turn them into Airbnbs,” she said. “We were losing a few [rental] managements to Airbnb but a lot have since come back to us.”
Ms Besser said more Airbnb users tended to drop out of the market during the seasonal downturn, but couldn’t say if they’d be tempted to come back during warmer weather.
“I know my family won’t do it again, but it’s not to say others wouldn’t return to it,” she said.
Tracking the exact trends in the market was difficult, University of Sydney researcher Professor Nicole Gurran said.
The research focus was on the effect on the property market, and how long-term renters had been affected.
“At the moment we don’t want international tourists competing with low income people and workers in the housing market,” she said.
https://www.domain.com.au/news/melb...ls-as-airbnb-loses-its-shine-20180601-h10t5p/