I don’t live in Melbourne (I’m from Buenos Aires) but the same is happening here, and I believe it will affect the majority of the major cities Airbnb is present. The supply is growing 50% per year but the demmand is steady. Preparing a furnished, well appointed apartment for the short term rental isn’t a small investment, so why people do it without knowing the true income they will get and the risks that are involved? I listed my place back on 2011 when there was a small subset of properties than now. I would probably think it twice to add a new one now that I know how hard it is to get booked.
Am I missing something? I quickly read the article and in the first paragraph it says the drop was 32%, which is not great but it’s not horrible.
I am thinking it is a good thing that my city put a STR ordinance into effect on January 1 of this year, which restricts Air-type rentals to owners-only for primary residences, one only per owner, and they must be licensed. All renters (as opposed to owners) are illegal, even for a room-only STR. So far, I’m on par with last year, even though my prices are higher. So, maybe regulations are not such a bad thing, after all.
Yes, the headline of the article mentioned 40% and then it said 32% but it doesn’t matter the number. What the article is pointing out is that Melbourne STR aren’t a great deal against going LTR.
STR involves the risk of having months of low occupancy and besides there is more extra work involved than LTR.
For sure. When the income from STR drops a lot it only makes sense to revert to LTR. The market will correct itself when there are so many people getting into the act thinking they’re going to make a killing.