The WA state government hopes attractive cash inducements will encourage property investors to favour long-term rentals over Airbnbs.
Short-term rental accommodation (STRA) Australia-wide, like Airbnb and Stayz are now seen as a ‘public enemy’ when it comes to housing and rental supply.
So much so that state governments Australia-wide are starting to take actions to actively discourage it.
Short term gain-long term pain
For starters, last month saw the Victorian government announce a 7.5% tax on short-stay rentals, the first such levy in Australia.
Having concluded that short-term rentals are also contributing to the disappearance of rental stock in NSW, the state’s housing minister Rose Jackson is considering following Victoria’s lead with a similar tax on the accommodation listed on the state government’s short-term rental register.
Minister Rose is also contemplating the use of incentives to bring an additional 60,000-plus holiday houses and homes [that remain vacant across the state] into the long term rental market.
WA makes its move
Meantime, while NSW deliberates, WA’s state government is putting its money where its mouth is.
Firstly, the WA government now requires all short-term rentals to register with the state before taking short-term bookings. Short-term rentals will also have to comply with a slew of new regulations.
As a case in point, STRA properties in the Perth metro area (and elsewhere) need to seek council planning approval to advertise unhosted STRA properties.
It’s worth noting that property owners are only required to submit an application to their local councils if they intend to run unhosted short-term rentals for more than 90 nights annually.
However, all STRA properties, whether they require planning approval or not, will need to be registered by 1 January 2025.
While short-term rentals are an important part of WA’s tourism offering, WA Premier Roger Cook believes the impact on housing choices in some communities is impossible to ignore.
“I encourage owners of short-term rental accommodation to consider the new incentive and other benefits of transitioning their property to the long-term market,” Cook said.
Two-stage payments
Anyone who transitions properties advertised on short-term booking platforms, such as Airbnb or Stays to long-term leases stands to receive a $10,000 payment from the WA government.
Payments will be made in two parts:
- An initial $4,000 will be paid once eligible applications are approved.
- A final payment of $6,000 will be made once the long-term tenancy rental agreement hits a one-year milestone.
It’s understood that property owners can submit expressions of interest online with the formal application process expected to commence later this year.
How much WA landlords can charge in rent will also be capped depending on the region in which they formerly operated.
For example, in the state’s capital, the incentive will only apply to property owners charging $800 per week or less.
In the state’s south west the incentive drops to $650.
No silver bullet
While Cath Hart, CEO of the Real Estate Institute of Western Australia (REIWA), supports the state government’s short-stay initiatives, she says it’s no silver bullet for rental issues WA is facing.
Recent REIWA data suggests short-stay dwellings – suitable for long-term rentals – represent only a minute proportion of total dwellings, while the ratio to private rental dwellings is typically low.
“However, for some short-stay owners, this incentive may encourage them to make the switch. We need every long-term rental we can get at the moment,” she said.
“If [the] short-stay incentive puts a roof over one family’s head, that’s a positive.”
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