Airbnbs and other short-term accommodations in Byron Bay, on the NSW North Coast, will be limited to operating for just 60 days a year in a major policy shift aimed at increasing the supply of homes in the holiday hotspot.
A rising number of short-term holiday rentals has added strain in a region that has the highest rate of rental stress in the country – when people spend more than 30 per cent of their income on rent.
New limits will be imposed on short-term rentals in Byron Bay.
The new rules introduced by the state government on Monday – which will only apply to homes that are not located in areas with “high tourism appeal” or close to beaches – are in response to an Independent Planning Commission report that said the social impact of the holiday home market was “more significant” in Byron Bay than other parts of the country.
The policy does not affecthosted short-term rentals (where the host resides on the property during the stay), which can still be taken 365 days a year.
The commission presented 12 recommendations to the government to ease housing issues in the region, but the government will only implement the one cap.
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“Adopting all recommendations from the IPC report at this time would have had broader implications for the whole short-term rental network across the state,” a spokesperson for Planning Minister Paul Scully said in a statement.
The changes will come into effect on September 26 next year, following a 12-month transition period.
The government insists the measure is in direct response to the report and it will not pursue similar polices elsewhere in the state.
Housing crisis laid bare
The housing crisis in the Byron Bay Shire is particularly acute. A 2023 count of people on the street found 1623 people experiencing homelessness, a 34.5 per cent increase on the previous year. From 2021 to 2022, that number increased by just 5.8 per cent.
Byron Shire currently has 2280 short-term properties. They account for 97 per cent of unoccupied homes (homes that, during the census, were not occupied). Unoccupied homes make up 13.9 per cent of Bryon’s entire housing supply.
Byron Bay mayor Michael Lyon says the cap will “make a huge difference” in the holiday hotspot.Credit: Natalie Grono
“It will make a huge difference [in Byron Bay],” Byron Bay Mayor Michael Lyon said when the policy was first recommended. “Permanent residents are more beneficial to the economy as a whole.
“They are there 365 days a year, spending money more broadly and doing jobs that might not otherwise be done.”
‘A game-changer for the suburb’
Owners are currently allowed to lease their properties for up to 180 days a year. But with their returns set to be severely cut, the government expects some to return their properties to the full-time rental market.
Cherie Barber, who owns five Airbnbs in Byron Bay but lives in Sydney, is supportive of the move.Credit: Oscar Colman
“You’re going to see a massive transition from Airbnb rentals to fulltime rentals,” said Cherie Barber, a renovation expert and owner of five Airbnb properties in the shire. One of her properties is in a tourist zone, but she anticipates some others may be affected. “The returns are too small. They’re going to be forking out more money from their properties every single month.”
She says she supports the caps – though thinks a 180-day cap would be better – because the change will stabilise the community.
“It’s going to be a game-changer for the suburb ... It’s going to build a more solid community in Byron and surrounds, where businesses can rely on certain trades and [residents],” she said.
“It’s good for the residents, but it’s bad for investors.”
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