A short-stay “apocalypse”
By Meg Hill
The city’s rental market is flooded due to the coronavirus (COVID-19) pandemic causing the short-stay market to collapse, according to real estate agents and short-stay operators.
Belle Property’s Carlton and Melbourne business development and leasing manager Suzie Inglis told CBD News the CBD market was “absolutely flooded mostly with furnished properties that would usually be on Airbnb and other short term stay platforms”.
“Since all their bookings have been cancelled, owners have been turning back to the residential market to try and fill their properties with six- to 12-month leases,” she said.
Ms Inglis said on April 21 there were over 2200 apartments online in the CBD alone.
“In our busiest period this number will usually never exceed 1200, so you can clearly see the huge and rapid increase happening,” she said.
“The 1000 extra properties are all furnished and have all come online in the past two to three weeks which is simply unheard of.”
“This heavy competition teamed with the fact there are hardly any prospective tenants in the market anyway has forced owners to significantly drop prices in order to be competitive.”
Tony Penna, a short-stay operator in Southbank, said he had 30 empty properties he was trying to move into the rental market.
“There’s literally no revenue, every booking I had for the next three months is cancelled. I’m absolutely trying my best to put medium- to long-term tenants in them as fully furnished apartments,” Mr Penna said.
“When you look online for two-bedroom apartments in Southbank there’s around 800 already available.”
“There’s definitely a saturation of rental properties going onto the market, and many are fully furnished so you’d guess they’re likely from short stay.”
Mr Penna said another possible sign of the collapse of the short stay market was a significant increase in hard waste around the city.
“There’s hard waste flooded with furniture that appears to be from short-stays all around Southbank,” he said.
“The test will be how many short-stay operators can sustain themselves for this period, and what the market will look like on the other side.
Rus Littleson, a representative of property owners and long-term resident advocacy group We Live Here, said COVID-19 was an “apocalypse for the whole short stay industry”.
“We have residents telling us that short-stay operators are collapsing throughout the city,” he said.
“Short-stay companies that have been around for more than a decade have not been immune - they’re crumbling under the pressure of paying above-market rents with near-zero income.”
“We Live Here is hearing that short-stay operators are invoking the small print in their rental agreements and bailing out, abandoning their apartment owners in the long-term rental market.” •