Sydney is Airbnb's Australian boomtown, but not everyone is celebrating the website's success

Sydney is Airbnb's Australian boomtown, but not everyone is celebrating the website's success

Sydney is Airbnb's Australian boomtown, but not everyone is celebrating the website's success

Updated 31 January 2017, 7:30 AEDT

Airbnb's popularity is exploding in Australia, and Sydney is its boomtown, but real estate agents say our love affair with the online homestay network is driving up rents.

Zara* was the perfect tenant; clean, quiet and always paid her rent a month ahead. But she didn't stand a chance.

"One day I get a message saying they needed the apartment back," she said.

"I was paying $480 a week in Bondi Beach for this studio but then it pops up on Airbnb a few weeks later for like $300 a night."

It's an all-too-familiar story in the beachside tourist hotspot.

"All the units in that block, most of them were Airbnb full-time and they go for so much," Zara said.

"Everyone needs money and why wouldn't you [do it], but it is taking over and it is screwing some people."

Zara's story is not unique. In fact, her address in Sydney's eastern suburbs meant she was at the epicentre of Australia's Airbnb avalanche.

The website describes its Australian market as "growing". In reality, it's exploding, and nowhere is its influence more pronounced than Sydney.

In the 12 months to June last year, the number of Airbnb listings in the New South Wales capital doubled — yes, doubled — to about 17,000. By December 2016, that number had surged to 22,000 and it's still climbing steeply.

Rentals come off the market

Sydney real estate veterans noticed a blip in the city's white-hot property market last year.

With almost two decades' experience in the industry, Reece Coleman, a principal at Stone Real Estate in Double Bay, knows the eastern suburbs better than most.

"One of the big changes this year has been the number of typical rental properties that have been taken out of the market by Airbnb," he said.

Mr Coleman said casual listings fell about 25 per cent at his agency in the past 12 months.

In real estate, casual letting is when the owners of an investment property engage an agent to find tenants, but collect rent and manage the property themselves.

"Homes that we would normally lease out on a casual basis are not coming back and more people are buying properties and trying to lease them on Airbnb," Mr Coleman said.

"That's means there are less homes in the market, which pushes rents up."

And rents are up. NSW Government data shows the cost of leasing a two-bedroom dwelling in inner Sydney has risen almost 15 per cent in the past three years.

Areas defined as "inner Sydney" include the central business district, eastern suburbs, inner west and north shore, among others.

'It's ethical and honourable'

John* has been in the travel and accommodation game for more than 35 years and runs an established and well-known business in Sydney.

He manages about 20 Airbnb listings.

"I get frustrated when I see negative coverage of Airbnb because there are good people doing good things in this city," he said.

"A lot can be achieved if businesses, body corporates, clients and governments actually work together, because our business has shown that it can work."

Airbnb accounts for between 15 and 20 per cent of John's turnover.

"We self-regulate to make sure everyone is happy. It's ethical and honourable," he said.

"I understand the uninitiated can cause problems but our story is one that has been successful in providing a niche service to mainly corporate clients."

While those numbers sound impressive, an Airbnb spokesperson said typical arrangements resembled pocket money, rather than huge returns.

On average, Australian Airbnb hosts have guests 28 nights per year, and earn about $4,500.

"Overwhelmingly, Airbnb hosts in Australia are everyday people — mums and dads, seniors and young families — who occasionally list their primary residence or spare room to make a modest extra bit of income," the spokesperson said.

"Our hosts tell us this modest extra income helps pay off the mortgage, cover bills and household expenses."

Stats show Sydney is surging

Sydney is Australia's Airbnb hotspot, accounting for more than 25 per cent of the nation's listings.

Hosts can advertise multiple listings, which could range from a private room in their primary residence to an entire investment property.

Globally, Sydney is in the website's top 10 cities.

A milestone was reached on New Year's Eve when it climbed to be Airbnb's fourth most popular destination worldwide for the first time, behind New York City, London and Paris.

Despite having a comparable population to Melbourne, data from late last year showed Sydney had almost double the listings on the online homestay network.

City Population Airbnb listings (December 2016)
Greater Sydney 4.9 million 22,000
Greater Melbourne 4.5 million 13,000

*Figures are approximate

Of Sydney's listings, more than half come from the city centre, and eastern suburbs council areas of Woollhara, Randwick and Waverly.

That is Mr Coleman's turf. But as the Silicon Valley giant continues to march in, he may have found a silver lining.

"We're seeing properties come to us after the Airbnb process with extensive maintenance required and disgruntled neighbours," he said.

"There was a property in Randwick we managed for three years that went on Airbnb, but they had complaints from the neighbours.

"It took four weeks, but they had to bring it back to us."