New entrants disrupting existing markets are often faced with a pushback from the government; we have seen it with Uber and now, increasingly with Airbnb.
Airbnb has grown in popularity in recent years as part of a broader trend towards the ‘sharing economy’, where peer to peer platforms directly connect customers and providers.
Cities including Paris, Barcelona and Berlin have implemented strict restrictions on Airbnb accommodation. For some, this leaves doubt about its long-term viability overseas and at home.
So what does this mean for Airbnb in Australia?
Federal and state governments have clear tourism objectives, and short-term private rental services like Airbnb are beneficial to the government in meeting its accommodation supply and tourism expenditure targets.
Deloitte estimates that in 2017 Victorian Airbnb hosts accommodated 651,600 guests for over 1.1 million nights in Melbourne and regional towns across the state.
From an investment perspective, we see the benefits in three distinct circumstances.
An owner who wants a higher income, but is willing to take on a level of risk;
an owner who wants to use the property on the odd occasion and enjoy the benefits whilst enjoying an income which covers the outgoings; and for an owner who is going on holiday between 2 and 6 months and would like the property ‘house sit’ whilst driving an income.
Is Airbnb the future of property investment? Probably not, but for now it’s a great option if you find yourself in one of those positions and is certainly delivering results.