The City of Melbourne will encourage short-term accommodation operators to shift their properties onto the long-term rental market to deliver more homes for people wanting to live in Melbourne.
Melbourne has one of the biggest short-term rental markets in the country, with more than 4,100 residential properties currently being used for short stays in the City of Melbourne.
This means fewer homes available for people wanting to live in Melbourne, including key workers and students.
As Australia’s fastest growing city, Council must consider all options to create more housing supply.
At Tuesday’s Council meeting, councillors will vote to commence a consultation process to inform the development of new local laws that are designed to encourage the flip of short-term accommodation into long-term rentals.
If endorsed, Council will consult extensively with the community and key stakeholders – including short-term rental owners and operators – on any new policy options for the short-stay accommodation sector. Any new regulation would not be introduced until February 2024.
Options under consideration include a registration fee and a cap on the number of days a property is available for short-term rental.
A short-term rental accommodation local law would not apply to hotels or motels. The proposed changes are designed to ensure the city’s tourism sector continues to thrive, with more than 10,000 new hotel rooms becoming available in the past two years.
Housing is primarily a responsibility for the State and Federal Governments, and Council will continue to do what it can to advocate for practical solutions to increase the housing supply.
Quotes attributable to Lord Mayor Sally Capp
“We are in a housing crisis. Every home that becomes available matters. That’s why we’re looking at ways to encourage property owners to move into the long-term rental market.”
“As Australia’s fastest growing city, we are considering all options that will deliver more housing – and the quickest way to do that is to utilise housing that is already in place.”
“Based on benchmarking from other capital cities and municipalities, an annual registration fee for short-term rental properties may be set at $350, and a short-term rental cap may be set at 180 days.”
“This would be an important step to address the housing crisis and increase the number of homes available to our residents, students and key workers.”
Quotes attributable to Finance, Governance and Risk portfolio lead Councillor Philip Le Liu
“We know there are over one million unoccupied homes across the country, and short-term accommodation is a significant factor driving this.”
“Given the current discussions by both the Federal and State Governments around housing, our goal is to better understand the short-term rental industry, and to help shift short-term rental properties onto the long-term rental market so more Melburnians have choices.”
Key facts on Melbourne’s rental market
- Rental properties make up 60 per cent of available accommodation in the City of Melbourne.
- Melbourne’s rental vacancy sits at 0.8 per cent – well below a healthy vacancy rate of 3 per cent.
- There is a current shortfall of around 5,500 affordable housing units in the City of Melbourne.
- There are 4,100 active short-term rental listings in the City of Melbourne – around 14 per cent of Melbourne’s residential properties. 84 per cent of these properties are in the CBD, Southbank, Docklands and Carlton.
- 46 per cent of properties are rented out for 90 days or more, while 25 per cent are rented out for 180 days or more.
- More than 10,000 new hotel rooms have become available in the past two years in the City of Melbourne, and another 1,200 are under construction.