Short-Term Rentals in New Zealand: An Analysis of its Impact on Affordability

by: Scott Mears

A recent analysis by Infometrics, commissioned by Airbnb, sheds light on the impact of short-term rental accommodations (STRs) on New Zealand’s housing market. 

The report finds that STRs have a minimal influence on rental and housing affordability. It emphasizes that key drivers of rising rents and house prices include population growth and interest rates rather than the proliferation of STRs. For instance, in Queenstown-Lakes, STRs contributed a negligible 35 cents per month to rent increases, compared to a $101 weekly rise driven by population growth.

Fig 1. NZ Rental Affordability 2010 - 2024

Despite these findings, STRs face growing scrutiny from policymakers. As housing affordability remains a pressing issue, local councils and the central government may still view STR regulations as a politically expedient measure. 

Proposed regulations could include stricter zoning laws, limits on rental days or increased licensing fees. While these policies aim to address perceived imbalances, they risk reducing the economic benefits STRs bring to local economies, such as tourism revenue and job creation.

Airbnb reports that STRs contribute $2.5 billion annually to New Zealand’s GDP and support over 26,000 jobs. Balancing these economic benefits with housing concerns will require nuanced policymaking. As Infometrics Chief Economist Brad Olsen notes, New Zealand’s housing challenges stem primarily from supply shortages and low interest rates rather than the STR sector.

For STR operators and investors, this landscape presents both opportunities and risks. While demand for short-term rentals remains strong, particularly in tourist hotspots, regulatory uncertainty could affect profitability. Stakeholders should stay informed and engage in advocacy efforts to shape fair and effective STR policies that address housing needs without stifling tourism and economic growth.