Desperate Olympic housing shortage drives Airbnb demand

Buyers hungry for long-term cashflow are flocking to Brisbane apartments with a view to cashing in on the short-term rental market during the looming Olympic boom.

It comes as concerns grow over whether the Queensland capital will have enough beds to accommodate the influx of people set to descend on the state’s southeast corner, with the city currently only recording around 5000 Airbnb listings and an undersupply of hotel rooms.

K&S Property Group agent KC Yeung said he had noticed a significant change in buyer demand from houses to apartments, which was being driven partly by investors looking to make money from Airbnb in the lead-up to 2032.

KC Yeung of K&S Property Group. Image supplied.

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“With the Olympics less than a decade away, the potential for short-term rental demand is turning today’s apartment market into tomorrow’s cashflow engine,” Mr Yeung said.

“Savvy investors are moving now because they recognise that short-term accommodation will be in high demand during the Olympics. Buying today means securing value before the inevitable price climb.”

Position Property founder and director Richard Lawrence said he had also noticed an increase in demand from investors for apartments they could lease short-term.

This two-bedroom unit at 1903/1 Oracle Blvd, Broadbeach, is on the market via an expression of interest campaign, and described as having Airbnb potential.

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“We’re seeing that is a demand, but for us, and the projects we’ve been marketing, we’ve taken a pretty active role in setting up the structure where you’ve got a minimum of 90 days, so you’d have to let your property out for three months plus,” Mr Lawrence said.

“We really didn’t want to see that transient movement of people through foyers and key locks out the front, and those things that you might see starting to go around South Brisbane etc, where you’re seeing key locks all the way through on certain power poles. That’s not the product we’re looking to market.”

This two-bedroom unit at 2512/275 Wickham Street, Fortitude Valley, is on the market for $760,000 and above, and described as having Airbnb potential.

Three years out from the next Olympic and Paralympic Games in Los Angeles, holiday rental companies there are reportedly already booking rentals for people looking to stay there during — and for several months surrounding — the games.

Seiko Ma, founder of Brisbane-based short-term rental (STR) organisation, Alice’s Home, said the nightly rate of an Airbnb property depended on supply and demand, but for a two-bedroom unit in Brisbane it would be about $200 a night.

“Around the time of the Olympics we can expect the demand will be very high,” Ms Ma said.

“Right now, I have investors mentioning events, saying ‘don’t forget to increase the rate around events’.

“Airbnb rates tend to be in line with hotel rates — hotels like the Hilton. I would expect the Hilton’s rates to be up at least 30 per cent during the Olympics, maybe up to 50 per cent.

High-rise units on the Brisbane River in the Brisbane CBD. Picture: Glenn Campbell.

Ms Ma said rates could increase even further if the Queensland government imposed more regulations on the short-term rental market.

“It’s not the Olympics yet — we still have a great deal of migration and we need to keep the market fair and controlled for everyone,” she said.

According to Airbnb, listings in Australia have increased almost 20 per cent since 2020 to around 169,000 — that’s up from 142,000 five years ago.

But property analyst Michael Matusik point out that there were some 220,000 Airbnb listings in 2019, so, while numbers are slowly rising, the total count is actually 23 per cent less than the pre-Covid number.

Agents are reporting a surge in demand from property investors for apartments with short-term rental potential in the lead up to the Brisbane Olympics 2032. Picture: Nigel Hallett.

Sydney has about 18,000 Airbnb listings, of which 80 per cent are whole homes; Melbourne has 26,000 Airbnb listings; and Brisbane has just 5,400 Airbnb listings, of which 74 per cent are whole homes.

This equates to around four Airbnb listings per 1,000 residents or 1 per cent of private homes.

“I do wonder if there will be enough beds when it comes to accommodating the 2032 Olympics,” Mr Matusik said.

“I reckon that Brisbane, and even South East Queensland, isn’t big enough to host such an event. Barcelona — with 1.63 million residents — is a case in point.”

Property Council of Australia research shows the number of hotels built in Brisbane over the past five years has fallen by 90 per cent compared to the preceding five-year period.

Experts are worried about the lack of beds available to house the influx of people coming to South East Queensland during the Olympic Games. Photo: Steve Pohlner.

Property Council Queensland executive director Jess Caire said that while the Covid pandemic had contributed to the fall in new hotel rooms, ongoing construction challenges were the greatest barrier, with the cost of building a hotel room increasing by almost 40 per cent over the past five years.

“Add to that an outdated tax regime that actively discourages the kind of investment hotels rely on, coupled with planning hurdles and rising operating costs, and it is no surprise that the hotel pipeline has all but dried up, with only 618 new hotel rooms currently under construction in Brisbane,” Ms Caire said.

“With a 40 per cent increase in international tourist arrivals expected during the 2032 Games, we need bold policy changes if we are to build the hotels needed to accommodate these visitors.”

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