In response to “UQ report finds little evidence short-stay accommodation causes rental rises” ABC News 11 Sep 2023
Contributed by a Noosa Heads resident
Is the headline correct? Basically yes. Despite numerous research studies IN TOURIST HOTSPOTS around the world finding the opposite, the study by University of Queensland found ‘in general’, ‘on average’, ‘taking Queensland as a whole’, there is little evidence to suggest STRA has a significant effect on rental affordability except in a few hotspots (like Noosa).
The report indicates there is lack of detailed, widely available and accurate data on STRA activity and uncertainty about the exact nature and precise location of activity in any region. The research team suggest this lack of accurate data limits their ability to verify claims regarding the effect on affordability and housing supply. They also say the findings were limited by the very short time span available to complete the research including a number of delays in the delivery of the key data.
Saturation of STRA’s
Those of us who have been keeping up with the STRA debate in Noosa can see that the UQ may have vastly underestimated the number of STRA in Noosa Shire. However even with limited data, and UQ’s estimated saturation of 6.4%, Noosa stands alone as being the ONLY shire in SE Queensland with saturation above 2% of dwellings. In the state only Douglas shire in North Queensland has a higher saturation.
The researchers do indicate their estimation of 6.4% saturation in Noosa is at odds with Council’s STA Monitoring Report, and recognises that saturation is highest in coastal suburbs. There is a big difference between 6.4% and Council’s estimated 17%.
Taken from: UQ 2023, Table 2: STRA dwellings in suburbs of the Noosa Shire Council (Deckard 2023-Q1and Noosa Council Monitoring Report)
Rental Affordability
According to the UQ report Noosa has the least rental affordability of all LGAs. Rental affordability has decreased since 2021 for both houses and units. In Noosa, houses were 14% less affordable and units 18% less affordable in 2022 than they were in 2021 (22.35% and 24.80%, respectively in 2022 over 2019 levels).
While the report found that in Queensland there is no clear pattern of increase in the per cent of dwellings used for STRA over the observed period of 2018 to 2023 Noosa is the only LGA that shows a steady increasing trend in saturation. Coupled with the highest increases in rental affordability that might be telling us something about the link between STRA and rental affordability in hotspot Noosa.
Supply and Demand
The report suggests the key issue driving rental market disruption in the state is a limited supply of dwellings in the face of strong demand for accommodation from population increase. Basically, supply is not keeping up with demand. It also suggests that where rental stock has been removed from the market it is much more likely that a home has been purchased by an owner-occupier than to be used for STRA.
My quick comparison of the 2016 and 2021 Census data indicates Noosa’s population increased by 4173 and the number of dwellings by 2467 in those five years. At an average occupancy of 2.5 per dwelling those new dwellings should be able to accommodate over 6,000 new people, well above the actual increase in population. So, if there’s a supply issue in Noosa something else is at play. Supply is apparently more than keeping up with population increase here.
Noosa is Different
While it acknowledges STRA do have an impact on supply, the UQ report concludes that the impact of STRA on the rental market across Queensland is likely to be small; but there’s that ‘hotspot’ qualifier again. “The findings of this review… do point to areas of significant STRA “hotspots” that may be altering the previous usage of dwellings in concentrated areas”. That sounds like coastal Noosa to me.
The University of Queensland report was commissioned by the Queensland Department of State Development, Infrastructure,Local Government, and Planning (DSDILGP). Its primary focus was to address the extent to which STRA is impacting the permanent rental market in Queensland.
The report can be read in full at this link:
Editor's Note:
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