A policy aimed at taming soaring rents in some of New South Wales’ (NSW) most loved coastal towns has fallen flat.
That is the blunt conclusion from researchers at the University of Queensland, who examined whether limiting holiday-letting to 180 nights a year would free up homes for locals.
For older Australians—many of whom either own investment properties or worry about their children and grandchildren being priced out of the market—the findings should prompt a sober rethink of what really drives our regional housing crunch.
The policy in a nutshell
- Where: Byron Bay, Ballina, Clarence Valley and Muswellbrook
- What: A 180-day cap on short-stay rentals listed on platforms such as Airbnb and Stayz
- When: Introduced progressively from late 2021 as part of the State Government’s post-COVID cost-of-living response
Hosts were told that limiting holiday lettings would encourage more owners to switch to traditional, longer leases, easing the pressure on locals desperate for a roof over their heads.
Inside the research
University of Queensland academics examined four years of data—2019 to 2023—spanning pre-pandemic conditions, lockdowns, the announcement of the 180-day limit and the tourism rebound that followed.
They tracked daily listings on Airbnb and Stayz across Byron Bay, Ballina, Clarence Valley and Muswellbrook, then compared those figures with advertised weekly rents for long-term leases.
Using ‘advanced modelling techniques’, Professor Alicia Rambaldi and Dr Frank Zou isolated the effect of the cap from broader market forces such as migration and changing holiday habits.
This allowed them to test whether restricting short stays truly filtered through to cheaper rents for locals.
What they found—and did not find
At first glance the policy seemed to bite: Byron Shire recorded a ‘temporary 22 per cent drop in listings’ soon after the rule took effect.
Yet, as Dr Zou notes, the numbers ‘soon recovered’, and there was ‘no significant or sustained reduction in short-term rental activities’.
Crucially, Professor Rambaldi reports, ‘We found no significant rent level decrease.’
The team concluded that ‘the 180-day caps in these specific NSW communities do not appear to have had the intended effect of promoting long-term rental affordability’.
While enforcement difficulties—hosts listing across multiple platforms to skirt the cap—further blunted the policy’s impact.
Why the policy fell short
- Enforcement hurdles: Local councils lack the resources to police nightly booking tallies or track hosts juggling multiple platforms.
- Owner incentives: For many, the flexibility of short-stay income outweighs the certainty of a traditional lease, even under tighter rules.
- Visitor demand: Post-COVID travel patterns show Australians remain keen on regional breaks, keeping nightly rates strong enough to tempt owners back.
Associate Professor Thomas Sigler notes that Byron Shire has since tried an even stricter 60-day cap—with exemptions for inner-town and beachfront properties.
Whether that tighter screw will make a dent is an open question the team plans to investigate.
Lessons for policymakers and investors
For governments, the study suggests that nightcaps alone are unlikely to shift the dial on regional housing stress.
Without stronger compliance tools or incentives to move properties into the permanent rental pool, many owners simply adapt.
For property holders—particularly older Australians who may own a holiday unit—the findings underscore the need to watch regulatory shifts closely.
A profitable short-stay today could face tighter limits tomorrow, so diversifying income streams and stress-testing investment returns against stricter rules is prudent.
Credit: ABC News / YouTube
What happens next?
- Further research: The team will track Byron’s 60-day cap to see if deeper cuts really push homes into the rental pool.
- Broader debate: As regional councils across Australia experiment with similar measures, evidence-based discussion becomes vital. Knee-jerk rules risk pleasing no one—holidaymakers, homeowners, or renters.
Closing thought
Australians in their 50s and 60s remember when a beach shack rental was simple: summer tenants out, winter tenants in.
The rise of app-driven holiday lettings has added both opportunity and complexity. This latest study reminds us that well-intentioned caps may not provide the silver bullet many hoped for.
Do tighter limits on holiday rentals strike you as fair, or should governments focus elsewhere to tackle housing stress? Share your thoughts with the YourLifeChoices community below.
Also read: From decade-long queues to dingy rooms—how ‘neglected’ housing hits home
