State governments across Australia have no meaningful policies for easing the chronic under-supply of rental properties – but they do have a talent for using the rental shortage as an excuse to raise extra revenue from the housing market.

One of the primary tactics they use is to scapegoat a section of the community and blame them for the problem that they, the politicians, have created – and then hit the demonised group with new taxes and pretend that they’re doing it to deal with the rental shortage.

The worst offender in this regard, although not the only one, is the State Government in Victoria.

Victoria, which has the highest property taxes in the nation, is by far the worst place in Australia to own an investment property – and the State Government there continues to work hard to confirm that reputation.

Its latest move is to blame the rental shortage on property owners who use short-term letting platforms like Airbnb, rather than have permanent tenants.

Choosing to use short-term letting is a perfectly reasonable and legal thing to do – and there is considerable public demand for houses and apartments made available for holiday letting, as an alternative to expensive hotel rooms.

But the Victoria Government has decided to demonise owners to use Airbnb and other similar platforms so that they can hit them with a major new tax and raise some desperately needed revenue for a government that is strapped for cash.

They’re claiming it will fix the rental shortage, but of course it won’t.

Airbnb didn’t cause the rental shortage in Victoria or elsewhere in Australia – it’s a very minor part of a much larger problem, and curtailing it won’t create higher vacancies and lower rents for permanent tenants.

This has been confirmed by a number of university studies, including one by the University of Queensland which found that banning short-term letting would not make any significant difference to the rental shortage.

And RMIT University in Melbourne has come up with a similar finding.

An RMIT University expert says the Victorian short stay rental reforms won’t solve the rental housing crisis.

Dr Liam Davies, an urban planning expert from RMIT’s Centre for Urban Research, says the new powers granted to Victorian councils and owners corporations to restrict or ban short stay rentals are UNLIKELY to have a significant impact on the state’s housing crisis.

Dr Davies said the reforms will likely have minimal effect on overall rental affordability.

He says: “This change to short stay accommodation is likely to have positive benefits at a local level but may not significantly impact the state’s rental affordability issues.” 

Dr Davies cautioned against expecting widespread changes to the rental market as a result of these policies.

He said it’s unlikely that all those Airbnb dwellings would be shifted to long-term rentals – so the effect of the reform will probably be minimal.

The most likely response of property owners faced with these new restrictions will be to sell – as many investor owners of Victorian properties have already done recently – thereby making the property shortage worse.