STRA's limited impact on rents
New analysis by Infometrics has found that the short-term rental accommodation (STRA) sector has a limited effect on rental prices and no significant effect on house prices across New Zealand’s major urban areas.
The primary factors influencing rents and house prices are population growth and interest rates.
Influencing factors
The independent study, commissioned by Airbnb, identified various factors influencing rental and house prices, including population growth, interest rates, incomes, and STRA numbers.
“Our analysis shows that population growth and interest rates had the greatest influence on rental prices in the areas we analysed,” said Brad Olsen (pictured above), Infometrics CEO and principal economist.
Focus on major urban areas
The study focused on Auckland, Wellington City, Queenstown-Lakes District, and Christchurch City territorial authorities.
The analysis found that the main drivers of rental and house price increases are population growth and interest rates.
“STRA only had a limited influence on rents and no real influence on house prices,” Olsen said.
Detailed findings
“For example, our analysis for Queenstown-Lakes District found that STRA contributes negligibly to monthly rental price increases, with the average amount being an additional 35c/month,” Olsen said. “Over the period January 2018 to September 2023, population growth influenced around a $101pw increase in weekly rent, while STRA only influenced $11pw.”
Broader market challenges
Olsen emphasised that the New Zealand housing market suffers from a lack of supply, causing house prices and rents to rise over time.
The analysis highlighted that before the pandemic, strong population growth, low mortgage interest rates, and insufficient new housing supply led to significant house price inflation.
Airbnb’s perspective
“Airbnb welcomes collaboration with governments on sensible regulations for our sector,” said Susan Wheeldon, Airbnb country manager for New Zealand and Australia.
“This new analysis demonstrates that short-term rentals are not the main drivers of housing challenges. Even in Queenstown, Airbnb’s influence on annual rental prices is less than the cost of a takeaway coffee.”
Economic contributions
Wheeldon also noted the economic contributions of Airbnb, which she said injected $2.8 billion into New Zealand’s GDP and supported over 22,000 jobs.
“We want to continue to work with governments and communities to implement consistent nationwide rules for short-term rentals,” she said.
Full report available
To see Airbnb’s existing proposals for regulations for the sector, visit its website. The full independent analysis by Infometrics can be found here.
Read the Infometrics media release here.
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