Financial Analysis of short-term rental accommodation

The NSW statewide regulatory framework for short-term rental accommodation (STRA) was implemented in 2021. It incorporates a planning framework, fire safety standards, Code of Conduct and a government-run STRA Register and an Exclusions Register.  

In 2023 the City of Sydney Council (the City) undertook a review of the STRA sector to understand the impacts of STRA on rental availability and affordability, and tourist accommodation in the Sydney local government area (LGA).

What we did

Atlas worked with Mecone who led the review of STRA accommodation on behalf of the City. The review examined the policy and statutory context and effectiveness within which the STRA sector operates. It analysed time-series data to observe if there were direct relationships between the supply of STRA accommodation and rental availability and affordability.  

The review considered the financial and investment returns of short-term rental accommodation relative to conventional, long-term rental accommodation that could be expected in different areas of the LGA.  

The outcome

The review found a lack of compliance with the regulatory framework as well as a clear financial incentive for STRA over traditional rental accommodation in certain sub-markets. Despite that, the quantum of STRA supply across the LGA was considered unlikely to have had a distortive impact on the local housing market.