Thousands of short-stay rentals flouting registration rules in Sydney, research finds

<span>Sydney lord mayor Clover Moore is calling for a 90-day annual cap and a levy of up to 10% to be applied to all short-term rental bookings in the area, with revenue to be returned for social and affordable housing.</span><span>Photograph: Lisa Maree Williams/Getty Images</span>
Sydney lord mayor Clover Moore is calling for a 90-day annual cap and a levy of up to 10% to be applied to all short-term rental bookings in the area, with revenue to be returned for social and affordable housing.Photograph: Lisa Maree Williams/Getty Images

The City of Sydney will call for major reforms to the short-term rental sector as it raises concerns that thousands of properties on hosting sites such as Airbnb have been operating without valid registrations.

Research commissioned by the city found that while there were about 2,500 active properties in the Sydney local government area (LGA) last year, according to New South Wales government figures, there were closer to 5,500 properties active in the area according to data sourced from AirDNA, a rental insights company based in the US.

The report by urban planning consultancy firm Mecone found that even though under state laws booking platforms should not allow bookings without accurate registration information, there was “evidence” of people finding ways around it.

Related: Brisbane to introduce Airbnb permits for property owners amid housing crisis crackdown

The research is being released after the Brisbane lord mayor, Adrian Schrinner, announced permits would soon be required for homes on Airbnb in the city.

Last year, Victoria announced it would introduce a 7.5% levy on platforms including Airbnb and Stayz, with hopes to raise $70m annually for affordable housing.

The Sydney lord mayor, Clover Moore, is calling for greater regulation of the sector, a 90-day annual cap and a levy of up to 10% to be applied to all bookings, with revenue to be used for social and affordable housing.

“A balanced approach that distinguishes occasional short-term letting from commercial tourist accommodation is required, to allow short-term letting under circumstances that don’t detrimentally impact rental accommodation supply,” Moore said.

“The city supports a regulatory framework that acknowledges the benefits of the sharing economy, while minimising the impact on housing affordability, safety and amenity.”

The research found a state-wide levy was a “strategic opportunity to create a new and significant revenue stream” that could be used to address critical housing needs across the state.

Related: Airbnb says only 1% to 2% of homes in Australia are short-term rentals. What does that really mean for renters?

The paper found the current 180-day cap for listing was not an effective deterrent against switching long-term rentals to Airbnb and Stayz listings.

As it stands, only the Byron Shire is allowed to impose a stricter cap after the state’s Independent Planning Commission last year sanctioned the coastal council to impose a 60-day annual limit on short-term rentals.

The research also found enforcement of policies was “fragmented” and insufficient to “counterbalance the financial benefits derived from flouting” the rules.

The state government introduced a requirement in 2021 for all short-term rentals to be registered. Department of Planning officials have met with the council over its concerns about “alleged non-compliance of [short-term rental] property owners”, a spokesperson said.

“Non-compliance matters can be referred to the NSW fair trading commissioner for further investigation.”

The spokesperson also said the department was “committed to better and more transparent compliance enforcement” and the issue would form part of the sector review under way.

Related: Airbnb forced to pay up to $30m for misleadingly charging Australians in US dollars

The housing minister, Rose Jackson, said the review would be handed down “in the coming months” and all reforms would be “aimed at incentivising the long-term rental use of properties”.

Airbnb’s head of public policy in Australia, Michael Crosby, disputed the numbers put forward by the Sydney council, saying the registration scheme was “designed to provide a single source of truth about the number of listings”.

“It is disappointing the City of Sydney is using scraped data from a third party,” he said.

“Night caps, both locally and internationally, have not worked to improve housing costs or supply.”

The chief executive of the Australian and New Zealand Short Term Rental Association, Mitch Price, also raised concerns about the AirDNA data and said caps would “not work”.

“Relying on potentially flawed data could lead to misguided policy decisions that fail to address the actual state of the short-term rental market,” he said.

“Overestimating the number of rentals might prompt unnecessary regulations, while underestimating it could lead to insufficient oversight.”

According to the government, there are now 50,079 properties registered as short-term rental accommodation options across the state. Of those, almost 32,000 are non-hosted, meaning the renter can occupy the whole property.

Official figures show there were almost 1,000 extra properties registered between June 2023 and June 2024, with more than 3,000 properties registered in the Sydney LGA.