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New Zealand rent prices recently dropped for the first time in a decade, leading some property experts to blame Airbnb owners for the drop.
Kiwi renters starting new rentals in May were offered marginally cheaper prices than renters starting new terms a year earlier, recent Government rent data showed.
Auckland and Queenstown renters got even better deals with prices down 0.5 per cent and 9.5 per cent respectively last month.
StatsNZ said the rent drops coincided with rumours holiday homes were being converted into regular long-term rentals due to the lack of foreign tourists.
Experts argued this was increasing the supply of rentals, giving renters greater choice and helping push prices down.
Now exclusive data from analysts AirDNA showed the number of Airbnb and Vrbo holiday homes advertised in May and June did drop significantly compared to the same months last year.
However, AirDNA cautioned against interpreting the data as meaning Airbnb owners were converting their holiday homes into long term rentals.
It said more than half of the world’s Airbnbs were not full time rentals, meaning the number advertised for rent always fluctuated and that AirDNA didn’t expect to see a long-term decline in supply of Kiwi holiday homes.
Understanding what is happening with Airbnb and other holiday homes has repercussions across the economy.
Renters already facing high rents stand to be the winners should an inflow of former holiday homes improve the long-term rental supply and push prices down.
House prices could also be pushed down should investors view an influx of new rentals on to the market as lessening their returns from buying new properties.
Hotels, holiday parks and motels could also benefit from a reduction in competition from holiday homes at a time when international tourism has dried up.
AirDNA’s data showed the number of holiday homes advertised for rent on Airbnb and Vrbo in June was 26,837 or 2877 fewer homes than in June 2019.
The number of places offering private rooms for rent was 8682, down 4161 on a year earlier.
In total this meant there were 102,319 fewer choices or “listing nights” last month for Airbnb users than a year earlier.
Total bookings hit 178,063 last month compared to 230,553 a year earlier.
Otago and Auckland were worst hit with bookings down about 15,000 and 20,000 respectively.
AirDNA believed many Airbnb hosts were simply taking a break, however.
It said converting holiday homes into long term rentals was expensive, especially with new Healthy Homes Government regulations due to come into effect and which require all rentals to meet stringent health standards.
Many Airbnb hosts also had large bookings later in the year with AirDNA data showing there were more holiday homes scheduled for bookings this coming September than the same month in 2019.
Kim Rae, who owned Stay Waiheke, a business that managed Waiheke Island holiday home rentals on behalf of owners, said none of her company’s properties had been converted into long-term rentals.
Weekend bookings for holiday homes also remained strong, she said.
However, the lack of foreign tourists had led to a drop in midweek bookings due to Kiwis being at work at that time.
David Faulkner from Real iQ, which gives advice to property management companies, said holiday home owners attempting to rent their properties out for longer needed to be careful.
He had heard of holiday home owners in Christchurch attempting to advertise their holiday homes as available to the same renter for periods longer than one month.
However, while holiday homes were exempt from Residential Tenancies Act rules, homes rented out longer than 28 days could suddenly become bound by the act.
That meant owners of holiday homes not meeting Healthy Homes standards could be fined.
Similarly, while Airbnb owners typically demanded full payment upfront, owners of homes bound by the RTA could only accept a maximum of four weeks rent upfront.
Holiday home owners violating these rules “were exposing themselves to substantial risk” and possible hefty fines, Faulkner warned.
Source: nzherald.co.nz