Each summer, Australians partake in a time-honoured tradition, migrating en masse to seaside and countryside retreats for a well-deserved break. The allure of these seasonal sojourns often sparks a recurring desire: the ownership of a holiday home. This aspiration has become more achievable in recent years with the rise of short-stay accommodation platforms like Airbnb and Stayz, which provide an opportunity for rental income.

However, the evolving landscape of government and council regulations is beginning to undermine this short-stay rental paradigm. For those considering the viability of holiday home ownership, it’s essential to comprehend the lifestyle and investment considerations, as well as the potential repercussions of recent regulatory shifts.

Lifestyle or Investment?

The prevailing sentiment suggests that the purchase of a holiday home should be driven by lifestyle aspirations rather than investment objectives. However, the financial implications of owning a holiday home are far from insignificant. Beyond the initial purchase costs (e.g., loan repayments and stamp duty), there are ongoing expenses such as insurance, council rates, and utility bills to consider.

Conversely, the advantages are evident: you gain a second home to relish at your leisure. And while it may not be a primary concern, there’s also the potential for capital appreciation over time.

The decision becomes more intricate if you intend to utilise your holiday home for personal vacations while also renting it out periodically. Rental income can help offset costs, but there may be additional expenses, such as management fees and landlord insurance, associated with renting it out.

Regulatory Impact

A key consideration for current and prospective holiday homeowners intending to rent their properties on the short-term market is the influence of regulation.

While platforms like Airbnb have offered some homeowners lucrative income streams and fostered competition in the accommodation sector, various local and state governments have started implementing measures to discourage short-term rentals in an attempt to alleviate the shortage of long-term rental housing in certain tourist hotspots.

For example, Brisbane City Council levies a 65% rates surcharge on short-stay properties rented out for more than 60 days a year, while Hobart City Council recently voted to double rates for short-stay owners.

The Victorian government has announced a 7.5% levy on revenue collected by platforms such as Airbnb and Stayz from 2025.

These are just a few of the reforms. More are likely to be introduced unless the housing crisis is addressed soon. But will this alter the calculus for holiday homeowners?

Holidaying Alternatives

The financial commitment of property ownership is considerable, entailing significant upfront and ongoing costs. So, what other accommodation options are available that could provide better value for money?

Hotels and motels, while not present in every small town, could be a viable option for smaller families. To secure the best deal during the peak summer season, it’s recommended to book early and compare prices across various websites and directly with the hotel.

For families or groups seeking an entire house, short-term rentals through Airbnb or traditional letting agencies might be the best choice. As with hotels, early booking is crucial to securing your preferred home at a reasonable price. It’s also worth contacting the property directly for potential discounted rates.

For a unique holiday experience, consider a house swap with another family. Numerous online platforms facilitate this process, and while these websites typically charge a fee, it’s likely to be much cheaper than renting a holiday home or paying for a hotel.

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