Airbnb’s are raking in more money than the long-term property market and consuming new housing, according to a new report.

The Airbnb: From a Housing Problem to a Solution report examined the impact of short-term rental (STR) on communities across Australia.

“The growth in STRs has been significant, with the equivalent of 74% of new housing supply heading straight towards Airbnb. This has magnified the challenge renters and home buyers face in the never ending housing crisis,” said the report’s author Karl Fitzgerald, Managing Director of Grounded Community Land Trust Advocacy.

“Short term rentals such as Airbnb’s have enjoyed an 81% higher return than investing in the long-term rental market,” he said.

A recent Kiama Council’s submission to the NSW Minister for Planning and Public Spaces, Paul Scully, said there was, “no clear evidence that by changing regulations properties would be returned to the rental market”.

Kiama’s short term accommodation is booming with 612 (six percent) of properties registered as short-term rentals. Byron Bay has eight per cent.

In the report, 12,000 STR properties were analysed across tier one tourism communities in Hepburn Shire, Mornington Peninsula, Byron Bay, Fremantle, Victor Harbor, Hobart, Noosa Heads, Coolum Beach, Port Douglas, the Whitsundays, Warburton, and Apollo Bay.

The study ranked towns according to the profitability and saturation of STRs to LTRs, alongside the absorption of new housing supply into STRs.

The top five most affected communities were Warburton, Apollo Bay, Port Douglas, Noosa Heads and Hepburn Shire.

Apollo Bay and Noosa Heads had twice as much stock on the STR market as the LTR rental market. Warburton had almost no new supply, but STR had accelerated at a dramatic rate, taking away from existing rentals.

Key findings:

• $584.6m in net profits was enjoyed by STR owners;
• The 11,935 STRs reviewed delivered an average net profit of $48,980 each year;
• Net returns were 80.9% higher for STRs over LTRs;
• STRs in the Whitsundays were most profitable at $60,125 per annum above LTRs;
• 74.2% of new housing supply was directed towards STRs across the 13 locales reviewed and
• Hepburn Shire, Byron Bay, Apollo Bay and Noosa Heads had more STRs than LTRs.

STR’s greatly outweighed LTR rentals and this was not limited to tourism towns, pointing to the lack accommodation availability across inner-city Melbourne, Sydney and Brisbane.

“The return on investment in STR will see more supply heading that way unless the government takes action and an ‘Airbnb Cap n Trade’ system is implemented to curb the growth,” said Mr Fitzgerald.

The report outlines the advantages of this system over the 90-day cap, with a closed loop redirecting STR profits towards the funding of affordable housing.

“The number of STRs needs urgent capping, with an auctioning of the remaining licences raising revenue for affordable housing. Over time, the cap on the number of STRs reduces, and licence values increase. In the process, the ‘cap n trade’ system rebalances the advantages of STR investment over LTR investment,” Mr Fitzgerald said.