Australians are increasingly choosing to stay in rented houses or rented serviced apartments when they travel. Some 10.4% of travelers stayed in this type of accommodation on their last trip according to Roy Morgan travel research conducted in the year to March 2018. This is substantially higher than a decade ago when only 7.1% stayed in rented accommodation.
Melbourne is Australia’s favoured destination with Airbnb travelers. 11.6% of people who visited Victoria’s capital city on their last trip stayed in either rented houses or rented serviced apartments on that trip, up 3% on a decade ago.
In comparison only 8.5% of people who visited New South Wales capital Sydney on their last trip stayed in either rented houses or rented serviced apartments on that trip, up 1.3% on ten years ago.
Queensland capital city Brisbane has also seen strong growth in this type of accommodation being utilised with 11.4% of people who visited Brisbane on their last trip stayed in either rented houses or rented serviced apartments on that trip compared to 7.2% in 2008.
In post mining boom Perth the trend is reversed now only 4.2% of people who visited the WA capital on their last trip stayed in rented houses or rented serviced apartments on that trip, less than half the levels of a decade ago when the mining boom was in full swing.
With such a considerable rise in Airbnb, one can only predict further pressure being applied to the sector. Melbourne lord mayoral candidate Gary Morgan is calling for more regulation of Airbnb properties. Mr Morgan says Airbnb properties bring down apartment values and harm the amenity for other residents. “It is vital that the lord mayor of Melbourne pushes for legislative action from the state government to ensure that people renting such apartments stay for a minimum of one month which forces the traveler to invest in the maintenance of the apartment and surrounding amenities,” he said.
The ATO has also issued a stern warning as they crackdown on the sharing economy including targeting thousands of Airbnb hosts earning undeclared extra income. The ATO’s assistant commissioner Graham Whyte said it would be using sophisticated technology including data matching, data mining and analytics to scrutinise every tax return filed.
“If you earn a fee from task sharing for odd jobs or providing a service and it counts as assessable income you just need to include the income in your individual tax return,’’ he said.
H & R Block’s Director of Tax Communications Mark Chapman said while it was important Australians declared any income made through the sharing economy, on the flipside these people could also declare appropriate tax deductions to coincide with this. “The ATO have gone to a lot of these sharing economy services, they’ll know if you’re on Airbnb, or are on Airtasker or you’re an Uber driver,’’ he said.
“Not declaring the income is a disaster when the ATO is data matching and they will typically come after you.”
It is also important to consider whether lenders will allow recognise Airbnb income as rental income. In cases of refinancing all lenders will require a copy of a residential tenancy agreement to prove you have rental income – they will not consider Airbnb as a verifiable and consistent source of revenue. This is important to note considering the further regulation applied by APRA to ensure responsible lending.
If you want to know more on how Airbnb might impact your lending objectives, don’t hesitate to contact one of our finance strategists.
Some key data around Airbnb:
- 180,000 property listings in Australia.
- 5,090,000 Airbnb guest arrivals in Australia. Guest arrival counts anyone who stayed at an Airbnb property. Under this metric an individual can be counted multiple times depending on how often they’ve used Airbnb.
- $4100 is the “typical” 2017 income for Airbnb hosts in Australia.
- 28 nights – that’s the “typical” number of nights hosted per listing. It appears that “typical” is not “average” because if you multiply 180,000 listings by 28 nights the answer is 5,040,000 nights, just short of Airbnb’s 5,090,000 guest arrivals. Logic suggests the average number of guests per stay would be significantly more than 1.009.
- Airbnb’s Australian guests came from more than 150 countries.
Courtesy: Roy Morgan, Ian Royall (The Age), News Corp Australia