Motions

Short Stay Accommodation

Adjourned debate on motion of Hon. R.A. Simms:

1. That a select committee of the Legislative Council be established to inquire and report on the short stay accommodation sector in South Australia with particular reference to:

(a) the role of short stay accommodation in contributing to the rental affordability crisis;

(b) the social and economic impacts of short stay accommodation on South Australian communities;

(c) the potential to regulate the short stay accommodation sector;

(d) the effectiveness of regulatory models adopted in other jurisdictions, both nationally and overseas;

(e) potential taxes or levies that could be applied to short stay accommodation and long-term vacant residential property;

(f) incentives that could be provided to home owners to transition properties listed on short stay accommodation platforms onto the long-term rental market;

(g) other strategies that could be adopted to activate residential property that is vacant long term; and

(h) any other related matters.

2. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

(Continued from 27 November 2024.)

The Hon. J.S. LEE (17:15): I thank the Hon. Robert Simms for moving this motion to establish a select committee on the short stay accommodation sector in Australia. Short-term rentals, popularised by platforms like Airbnb, have revolutionised the accommodation industry worldwide. However, this transformation has also sparked significant policy debates and regulatory challenges.

In Australia, the debate over regulations on the short stay accommodation sector continues to evolve, reflecting broader global trends. The debate over short-term rental regulations is multifaceted, including economic, social and community considerations. Given the housing crisis we are currently facing in South Australia, the terms of reference for this proposed select committee will allow elected members to look at all options that may be available to address housing affordability and supply. Such a select committee will provide the opportunity to investigate the impact of short stay accommodation on the housing market.

From my understanding, South Australia is currently one of only two states that have no formal oversight of the short stay accommodation sector. I believe a select committee to examine and inquire into potential options for regulating the sector and look to the effectiveness of regulatory models in other jurisdictions will be useful, particularly for members to hear from a wide range of stakeholders, for them to present their diverse views and present the parliament and government with information that will guide any potential policy reforms in relation to the short stay accommodation sector. With those remarks, I commend the motion.

The Hon. J.E. HANSON (17:17): I rise to give a few brief comments in regard to this. I think the Hon. Ms Lee has summed up the economic reasoning behind why we might need a committee such as this. I certainly support looking into what we see around those economic factors, which you can also see when you walk down a lot of suburban streets in Adelaide and, indeed, when you go out into the regions and you walk down the streets of those towns. The fact is that short stay accommodation makes up a large proportion of what we see on your average street. When you go doorknocking, from time to time you might find that no-one is home. Sometimes no-one has been home for quite some time, despite the fact that the gardens are watered.

The Hon. J.M.A. Lensink interjecting:

The Hon. J.E. HANSON: I will not even acknowledge such comments, the Hon. Ms Lensink. You are better than that. The fact is the garden is watered, it looks in good condition, yet of course no-one is there. I think this is a growing concern for a lot of neighbourhoods, certainly in the suburban districts of Adelaide. It does, however, have a component for regional towns, which want to encourage the kind of tourism that short stay accommodation can bring, so there is an economic argument to be made for both sides.

I look forward to seeing that played out in person so that when I do doorknock people, the Hon. Ms Lensink, they will be home and we can have those conversations about what a great job the Malinauskas government is doing by acknowledging select committees just like this and voting for them.

The Hon. F. PANGALLO (17:19): I will be short on this. I preface what I am about to say by declaring I have a conflict of interest in that I actually do have what is classified as a short-term holiday rental and have had that for a number of years, and that is in fact part of my superannuation. It is a holiday rental and has been operating as a holiday rental for many years. It was actually purchased as part of my retirement plans, and I am sure many others who have these short-term rentals have done exactly the same thing. So I declare that I do have an interest and, as a result of that, I will be abstaining from voting on this motion. I think that is only the fair thing to do. If there are other members in here who are in a similar position, I would urge them to also abstain and declare their conflicts of interest.

A couple of things I want to say about them. I do not object to the inquiry by the Hon. Robert Simms. It is probably worth having a look and seeing what the extent of it is and if there are any solutions that the committee can come up with that the government can also have a look at. I have no objections to them having a look at it. The objections I do have, though, are the calls for governments to take more control over the properties that people own. It is just becoming more prevalent in recent years where government ideology, government policy, government legislation, is now overriding the rights of property owners and their right to determine what they want to do with their own investment.

People spend a lot of money buying their property. Buying a home is the biggest single investment that a person could possibly make. Today it is an even bigger challenge for people buying a home because prices have gone up so much. That means people have to borrow an enormous amount of money to be able to pay off that loan. I do not know how people can borrow more than a million dollars and expect that they are going to pay that off over the term of the loan, unless they work a couple of jobs or have other sources of income, because the average worker would probably be lucky to earn $3 million over a lifetime. But, as I said before, I do object when governments start to dictate to property owners and landlords what they should do with their own properties, and I think that becomes a disincentive for investment in property.

We saw that with the introduction of the land tax by the Marshall Liberal government. Despite the warnings, they did not heed them and, sadly, the land tax reforms at that time were opposed by the Labor Party when they were in opposition. I was in opposition to it right from the start because I could see the damage it was going to cause in relation to the availability of rentals in South Australia. Lo and behold, what happened? Of course, the moment that came in, the enormous responsibilities that suddenly fell on property owners who may have had their properties in trust or whatever and the costs involved in that just became too much and we saw hundreds, if not a couple of thousand, maybe more, properties that were used for the rental market suddenly sold off by the landlords, the property owners, because they had had enough.

Many of those property owners were mum-and-dad investors who, again, invested many years ago with the intent that it was going to build their retirement savings when the time came for them to retire from their jobs. But as a result of that and the implications of this tax—and I met many of these property owners—they got out. They decided no, it is too hard, here is government again imposing this tax that is making it even more difficult.

It was also a disincentive to aspirational people who wanted to build some kind of wealth during their working days and look to the future. Again, it was wiped off the floor and we saw thousands of homes being sold and, of course, the property market boomed. It became hot—and still is hot now—and as a result we are seeing fewer rentals being made available because what had happened was that people had decided to buy the properties to live in. There were many who wanted to buy property for their families. Of course, we had the other whammy of immigration numbers that hit enormous levels last year, almost 600,000 people coming into Australia.

I do not know how many came into South Australia but I believe the figure is around 60,000 to 70,000. That created more pressure on people finding accommodation and housing and of course that brings up the price. After the COVID epidemic, the emergency ended and now overseas students have been welcomed back into South Australia and other parts of the country and, again, there is going to be a demand for accommodation for them.

It is just this perfect storm that has been created, and I will also blame governments for it—previous governments as well. This current Labor government is now trying to address the mistakes, the failures of policy by previous governments in not making enough land, green space available for developers to build their development projects around the metropolitan area and beyond. I think they call it the ring of development. There is a ring that surrounds the Adelaide metropolitan area and other areas, and previous governments did not want to expand beyond that and allow more housing development to go on.

You cannot just blame the influx of disruptors like Airbnb, Stayz and others for causing this problem—they did not. It was actually a problem caused by governments. Airbnb, Stayz and all the others I think seized on a great opportunity to make some money, some capital out of their idea of, again, using short-term rentals for people to utilise as holiday accommodation.

When you look at short-term accommodation, it tends to be cheaper than it is to hire a hotel room. That is probably one of the attractions of Airbnb, and it is also the location of where they are. They could be somewhere in the city, they could be in the suburbs. It may not be facing an idyllic beach somewhere in the state. Many short-term accommodation places are located in popular tourist locations.

It would be a bit unfair to then impose restrictions on those property owners, particularly on the number of nights or days that they would be able to make those properties available for short-term rental. It would put an imposition on them, who probably have a mortgage to pay off, and would deny them the opportunity to be able to earn some kind of income that may be related to their retirement savings. They might have a superannuation scheme that owns the property and derives its income from there.

There are other complex factors around all this. I think the other one that tends to be missed is the impact it could have on tourism. We have seen tourism numbers in South Australia increase in recent years, particularly after COVID, and, again, people would then utilise short-term rentals to find accommodation rather than go to hotels.

I notice there was an article today in The Advertiser by the Executive Chairman of Commercial General Adelaide, Jamie McClurg—a very successful developer, and I tip my hat to Jamie for what he has achieved in South Australia. He makes some good points in this article, 'Holiday homes a tradition, but Airbnb is Un-Australian'. He suddenly has latched on to the fact that people are unable to rent a house in the long-term and he focuses on where he says there have been:

…7,772 homes removed from the long-term rental market in favour of short-term stays, more than triple the available long-term renting stock…

I am not sure where Jamie got his information that those 7,772 homes were removed from the long-term rental market and put towards short-term stays. Certainly, a significant number probably were, but I would not think they all were. He says:

Renting a holiday house has been part of Aussie culture for decades but this is now beyond a joke.

I cannot understand why he thinks it is beyond a joke. Jamie himself built a development of holiday homes at Normanville, South Shores. You may see it on your travels going down south. Of course, I would not be surprised if many of those properties in that development are used for short-term stays.

I think that this discussion tends to move away from the ability of people to try to plan either for retirement or plan a safe investment. It tends to be anticapitalist and it is almost the typical ideology you would expect to hear from the Greens, where they seem to think that this could well be a solution to this crisis. The crisis was caused by government inaction and failure of their own housing policy. We can see that today. They are scrambling to now have developments underway in various parts of Adelaide, north and south and wherever, in order to meet the needs of people in our community. Homes are going up, but at a rather slow rate. I think on average it takes nine to 12 months just to build one home, and this government wants to build thousands of them in a particular period. It is not going to happen.

Then you have the other problem of the lack of infrastructure and the lack of forward planning—again, one of the biggest and worst failures of policy. You can take it back to the fact that it was privatisation of the E&WS department, which then became SA Water, and that has led to the situations that we have today.

Previously, under government control, the E&WS department were able to manage engineering and water supply. That was their job: to go out and install the sewerage pipes, the water pipes and whatever into expanding suburbs and do all that. Of course, the moment it was partly privatised and went into the hands of SA Water, which decided to corporatise it all, they took their eye off the ball and now we are presented with this problem in places like Angle Vale and also at Riverlea and elsewhere, where the infrastructure is not there and people have to have their sewage and their greywater trucked out every day. It is just a ridiculous situation.

In closing, as I said, the reason that we have this crisis today is not because of disruptive platforms like Airbnb and others, it is because of the failure of governments in this area, and now they are trying to scramble to find ways of putting people in. It will have an impact on tourism when you do this. It will have an impact on prices.

Mr McClurg made some comments today—he makes some good points about mandatory registration schemes, that platforms must be held accountable for ensuring compliance and receipt of occupancy certificates, which is not a bad idea. He then says that short-term rental properties should be required to obtain appropriate zoning approvals. I do not know what he means by that, because short-term rental properties are dwellings, they are houses—why should they obtain certain zoning approvals?

He makes a point about a minimum stay threshold to reduce high turnover transient stays, 'A maximum use threshold, say, eight weeks of the year. Think traditional Aussie summer vacation renting.' So what he is saying is that the only time you can rent out these places, that you might have bought as your investment for your retirement through your superannuation scheme, the only times you can earn a quid out of it is in summer vacation. The rest of the year, bad luck, give it to—I do not know.

When people want long-term leases, it would be for a year at least, minimum. Now of course we have new rental laws that again are placing impositions on landlords about leases, where they now have to give reasons to renters when they are going to cease the contract with their tenants. Now you have to give reasons for that, whereas previously it was up to the landlord, the property owner, to make a decision when and where to end a lease. You have taken that right away from landlords as well.

It could not work eight weeks of the year if people are reliant on these holiday homes for income to supplement their savings, their superannuation. He then says 'enforce the same safety and accessibility standards as hotels'. Okay, there are new requirements under the planning code for new homes or whatever, but we actually are talking about homes, we are not talking about hotels, so why do they need to comply with that? So I think that's a bit over the top.

Of course, you know what will then happen if you impose restrictions on short-term rentals in dwellings and whatever: there is going to be more demand on hotels and the prices of hotels are going to increase. If you have looked at trying to book a hotel anywhere in South Australia or interstate these days, it is quite expensive. You are lucky to find a room, certainly during peak periods, under $200 or $300 a night, and that is not exactly five-star accommodation—it would be rated much less. I am certainly not opposing the honourable member's reasoning in having the inquiry, and I look forward to seeing what the results of that are going to be. But, as I said, I will be abstaining from the vote after declaring my interest.

The Hon. J.M.A. LENSINK (17:38): I do not need to declare a conflict of interest for being a property owner, but certainly as a consumer of short-term stays I find them incredibly convenient for a range of reasons as a holiday option, as do I am sure a lot of Australians since the platforms have come to Australia—I will speak more to that in a moment. I think the issue of data collection and the capacity of this committee to access good quality data, get information from the platforms themselves and from various sectors, is going to be incredibly important, because we do hear lots of things thrown about in the public domain which might or might not be true. People reach conclusions based on their particular opinion of the market and the impact short stay rentals have had on the markets. I think I am going to be a member of the committee, and I will just flag that as an early matter that I think is incredibly important for us to get to.

Of course, if we are talking about housing and the current housing crisis we are in, as some speakers have already touched on, the key issue there is supply. The short-term rental market may be one component of that. It will be very important to establish how significant that is, but I do also note—to the broader issue of housing and housing supply—there is an inquiry through the Economic and Finance Committee into housing availability which has a range of terms of reference, which this could indeed fit into as well. The Hon. Jing Lee spoke, I think, to other economic issues, particularly with her understanding of tourism and those sorts of impacts.

I think I have heard the honourable mover of the motion equate at times the number of Airbnbs—well, indeed, it is the first term of reference—with its contribution to the rental affordability crisis. I think that is a particular question that we are going to need to prosecute very, very carefully. I do not wish to pre-empt what his particular views and outcomes in mind might be or if he was to form or already have a view that paragraph (a) is a non-contested issue—that it is contributing to the rental affordability crisis—and what impact that is going to have more broadly on regulation of issues. But the terms of reference, I note, are broader than just paragraph (a), which is the role of short stay accommodation in contributing to the rental affordability crisis.

As part of that discussion the conversion of long-term rentals to short-term rentals is of particular note. We as a committee will, I assume, hear from various sectors, particularly those that are involved in building or renting properties themselves. I note they are a very different product, and the two aspects to that are that on short-term platforms people essentially are seeking holiday properties; also, I think part of what has driven some of this debate is from when the ABS data was published a couple of years ago—the number of so-called vacant properties, which included a lot of holiday homes which are probably used by particular people themselves for their own exclusive use or for family and friends and the like and also those that are on the short-term rental market.

So location is one issue. I do note my understanding—and I stand to be corrected, and this will be part of the interesting exercise we will need to drill down to as the committee goes on: the correlation between holiday locations such as the south coast, Port Lincoln and the like versus areas where housing is most needed. At the moment the housing shortage is probably in every region in South Australia. It has not been so in the past, prior to COVID.

The other issue about the long term versus short term is the presentation, of course. While it may seem that on the sums if you own a property and you want to put it on the short-term market you can make a much higher income, there is much more work and presentation and servicing that is required to go into that versus long term where there is that stability and regular inspections as required by statute but nowhere near the sort of work that is required in short-term rentals. One of the issues that has been flagged is the issue of regulation. I have not had it raised with me that there is any particular crisis in terms of regulation of the industry, but I guess that is something that we will be looking at going forward.

One issue that I have had raised with me in the last couple of years was a particular case. It was an isolated case but it was an apartment building where long-term residents had been very negatively impacted by other property owners using their apartments within there for short-term guests and there was a particular issue that involved, for one of them, having to get assistance from the police and so forth because the guests were engaged in allegedly illegal activities. Whether that was a question for the strata corporation of the building is also something that I think is worth examining. With those remarks, I look forward to hearing the evidence and our deliberations following that.

The Hon. R.A. SIMMS (17:45): I thank honourable members for their contributions, and in particular I thank the government for their support of the inquiry. Indeed, I presume from the opposition's comments that they are also in support, so I thank members for that. Just to be clear, I want to touch on some of the themes the Hon. Frank Pangallo raised. It is certainly not my view that this is the only cause of the housing crisis. I do not think anyone has suggested that.

My reason for proposing this inquiry is that it may be playing a role. I asked my office on 21 January to look at the number of properties that were listed on the long-term rental market on websites like realestate.com.au and to compare those to the number of properties that were listed on short stay accommodation like Airbnb. The results of that were, I think, quite disturbing. What they found was that there were only 2,524 properties listed as long-term rental on that date versus more than 9,000 properties that were advertised on short stay accommodation websites like Airbnb.

Some will argue: is there a cause and effect? I would like to understand what is the relationship. Why is there such an over-representation of short stay accommodation versus such a shortage of long-term rental. I know from conversations I have had with people in the Port Lincoln area that there were a lot of people in some regional communities during COVID that, because there was a ban on overseas travel, moved properties that had been previously listed on the long-term rental market onto short stay accommodation.

My office found the issue much more pronounced in terms of the disparity between long-term rentals and short stay accommodation in some regional areas. For instance, on the Fleurieu south coast, there were more than a thousand properties listed on short stay platforms during the period that we examined versus just 19 long-term rentals in that area. I am really keen to look at these factors and look at what can be done.

I will certainly go into any committee with an open mind in terms of looking at what options there are. I am very keen to hear from key players. The Hon. Frank Pangallo has referenced an article in today's paper by Jamie McClurg. Thanks to the honourable member I no longer have to read the article; he has gone through it in great detail. Mr McClurg may well be somebody who we choose to hear from, along with the city council, which are taking action on this, and a range of other stakeholder groups. I thank members for their support and look forward to being able to sink my teeth into this this year. I think it is a really interesting area and one that is worthy of parliamentary inquiry.

Motion carried.

The Hon. R.A. SIMMS: I move:

That the select committee consist of the Hon. Dennis Hood, the Hon. Justin Hanson, the Hon. Michelle Lensink, the Hon. Tung Ngo, and the mover.

Motion carried.

The Hon. R.A. SIMMS: I move:

That the select committee have power to send for persons, papers and records, to adjourn from place to place, and to report on 4 June 2025.

Motion carried.