A year after controversial holiday rental caps were introduced in Byron Bay to boost rental availability for locals, the data is unclear about whether the endeavour has been a success. 

After the changes were introduced last September, non-hosted short-stay properties, where holiday-makers typically rent an entire property, in most areas of the Byron Shire could only be rented for 60 days out of the year.

Exemptions were made for the Byron Bay CBD and nearby Brunswick Heads, where holiday rentals could be let 365 days a year.

The change aimed to discourage property owners from using their investments as holiday rentals and instead place them in the long-term rental market.

It was hoped the move would provide more housing for residents and, ideally, drive down rental prices in one of the country’s most expensive regional areas.

Trees frame a lookout vantage point over the tops of houses and rooves towards a blue-green ocean.

Wategos is one of the most expensive and iconic areas of Byron Bay. (ABC North Coast: Emma Rennie)

Has it worked?

Figures from the NSW Department of Planning, Housing and Infrastructure show that the number of non-hosted short-term rental accommodation in NSW increased slightly in the past two years, but dropped by about 15 per cent in the Byron Shire.

DateNon-hosted STRA registered in NSWNon-hosted STRA registered in Byron LGASeptember 202329,7671,195September 202430,1861,064August 202530,2401,004Data: NSW Department of Planning, Housing and Infrastructure

Byron Shire Council Mayor Sarah Ndiaye pointed to an alternative data set collected by Inside Airbnb, which collated data from all listings on Airbnb.

It showed there were 2,221 Airbnb listings in the Byron Shire in June this year, 88 per cent of which were entire homes or apartments, and 767 of which were classified as recent and frequently booked.

A council report found there were 3,513 listings across the Byron Shire in 2019, and holiday rental listings had jumped by more than 250 per cent in the three years prior.

Cr Ndiaye said the drop in listings was a positive sign.

“Even if we got 20 per cent, 10 per cent of those houses back [into the rental market], that still makes a dent in the availability,” she said.

A ‘tight’ rental market

Data from property analysis firm Cotality showed the number of monthly rental and sales listings both in the Byron Shire and across NSW decreased this year compared to previous years, while rental vacancy rates also dropped.

“We’re seeing less properties go up for rent compared to this time last year, and compared to what we’d typically expect to see at this time of year, and then we’re also seeing less properties going up for sale,” Cotality economist Kaytlin Ezzy said.

“[Rental] listings are down about 25 per cent across regional NSW. They’re also down about 25 per cent across Byron Bay compared to this time last year.”

Ms Ezzy said there was also a “real tightness” in the Byron Shire rental market with lower vacancy rates pushing median rental prices up 8 per cent over the past 12 months.

“We would expect that’s going to continue to see some momentum, particularly with vacancy rates continuing to tighten and fall,” she said.

Aerial image showing a town centre next to a beach, with a cape and lighthouse in the distance and ocean behind it.

Demand for housing has put pressure on the regional coastal community. (ABC North Coast: Emma Rennie)

Byron Bay real estate agent Liam Annesley said there had been a 9 per cent increase in rental bonds issued in 2024, compared to 2019, or about 120 extra bonds.

“The properties that came available were probably ones that were periodically holiday let, and they weren’t performing as well in the holiday rental space,” he said.

Results to take time

Cr Ndiaye said the holiday rental cap only kicked in after a property’s annual registration was renewed, so properties that were registered just before September 23 last year would only now be subject to the caps.

She said that meant the full effect of the policy would not be seen for another year.

Sama Balson, the head of a women’s housing charity and a former councillor who supported the caps, said she had heard anecdotally the rental shortage had eased.

“I know entire families that were looking for a very long period of time, staying in temporary accommodation, who are now stably housed,” she said.

“That would indicate the houses are filling up, so that could be a positive spin on that [rental vacancy] data.”

A woman in a blue shirt stands on a staircase holding two suitcases.

Sama Balson has first-hand experience with the difficulty of finding a rental in the Byron Shire. (ABC North Coast: Emma Rennie)

Byron Bay Chamber of Commerce president Matt Williamson said tourism had suffered in recent years, and broader economic conditions such as the high cost of living made it hard to know the extent to which rental caps had influenced the Byron Shire housing market and economy.

“If you really want to know what the answer is, it’s begging out for a university to come in and do a genuine study into what’s happening in the local economy,” he said.

A close up of a man in glasses looking at the camera with a serious expression, with a row of bookshelves behind him.

Matt Williamson wants the 60-day cap removed. (ABC North Coast: Emma Rennie)

However, Mr Williamson said the cap had done more harm than good by hitting the tourism sector.

Businesses call for cap to be scrapped

Alloggio Group, which operates several holiday letting companies, said the region had seen a 35 to 40 per cent decrease in supply.

“Most of our owners invested in a holiday property to use it themselves, so the option to put it into a permanent letting scenario … wasn’t there for them,” regional manager Cameron Arnold said.

“We’ve seen a lot of owners just sit and lock up their property.”

A man in a white button up shirt sits with a laptop in front of him in a bright, beach-inspired office.

Cameron Arnold says property owners are leaving their houses empty rather than renting them out. (ABC North Coast: Emma Rennie)

Reid Campbell’s linen hire business relies heavily on the short-term rental accommodation market.

He said a downturn of about 25 per cent this year forced him to cut down on full-time staff and reduce the hours of his casual staff.

“I employ local staff … it’s been tough to tell those guys that I haven’t got enough work for them.”

A man in a t-shirt and cap stands in an industrial linen storage area with his hands on folded linen.

Reid Campbell says the cap on holiday letting around Byron Bay has hurt his linen hire business. (ABC North Coast: Emma Rennie)

Many said the cap had hurt ancillary businesses such as cleaners, gardeners, and tradespeople and linen companies.

“One of the biggest things I’ve noticed is people in those industries asking if there’s any extra work with us, and unfortunately, there isn’t,” Mr Campbell said.

A street lined with cars leads towards several large, modern houses, with dense bush covering the hill behind them.

High demand for housing in Byron Bay has made it one of the country’s most unaffordable regions. (ABC North Coast: Emma Rennie)

Mr Arnold said the cap was a poor decision that should be removed.

“I think people feel [the short-term rental sector] is low-hanging fruit and it’s easy to go after,” he said.

“It’s very hard to put a $3 or 4 million property that will [rent] for $2,000 a night into the bucket for affordable housing.

“They need to be treated separately.”

But Cr Ndiaye held firm.

“This was supported unanimously [by councillors], it was a sensible response to a really challenging issue,” she said.

A close up photo of a woman with long brown hair and a beaded green necklace smiling.

Sarah Ndiaye says the cap is designed to help a community struggling with housing shortages. (Supplied: Byron Shire Council)

“We fought for years, our community fought for years to get these changes and so I don’t see anyone shying away from them anytime soon.”

With other regional areas also grappling with the tension between tourism and housing affordability, both sides of the debate were aware Byron Bay was being watched closely.

“Airbnb really does change the fabric of a community, and it wasn’t planned for, and this is a response to a really difficult problem,” Cr Ndiaye said.