Holiday hotspots beg short-stay landlords to rent to locals as housing supply plummets

Port Stephens, Byron Bay and the South Coast attract tens of thousands of holidaymakers every school holidays, especially over summer.

But as investment property owners cash in on the domestic tourism market, locals are being pushed out.

Luke Muir was on the brink of homelessness when the house he called home for eight years in Port Stephens was sold.

"I have a real stable and happy job and I don't want to have to leave this beautiful town," he said.

Mr Muir has worked as a chef for 17 years at Nelson Bay's Little Beach Boathouse and had no plans to leave the area.

He had just four weeks to find a new home and took to social media as a last resort after being knocked back for multiple rentals.

"I've been applying for rentals for eight weeks straight and getting the same emails: 'Sorry, you just missed out.'"

The social media plea eventually paid off and Mr Muir was able to put a roof over his head.

"I was lucky to get help off a Facebook page and find a place locally, just around the corner from work," he said.

"A lady reached out to me and it all went through within a week."

But if that didn't happen, Mr Muir says he would've been "in big trouble".

"I'd probably be in a caravan or bounce around holiday houses ... I don't know to be honest," he said.

The 38-year-old even started searching for rentals in other states, like South Australia.

"But I don't want to leave this place. I love this place; I know where I'd rather be," he said.

While there are signs the regional property market is slowing, housing supply remains a big problem and some people have been forced to live in cars, tents or couch surf.

Mr Muir said on his current wage he could afford up to $420 per week in rent.

But, according to First National Port Stephens real estate agent Tracy Blosdale, there were limited rental options locally under $600.

"There's a couple of smaller rentals going for under 600 [dollars] but they're very rare; I wouldn't say that's the norm," she said.

There were 73 properties for rent in Port Stephens in late August on the realestate.com.au website. Just seven of those were units around $300.

According to PRD Real Estate, Port Stephens had a median house price of $1,011,000, and a median unit price of $655,000 in the first quarter of 2022.

There was a 22.7 per cent increase in median house rental price and a 40 per cent increase in demand for rental properties in the past 12 months.

Local councils are begging ratepayers with a second home to help keep locals, like Mr Muir, in town.

"Rent is so expensive and there's people that aren't the traditional style of homeless people, living in cars and couch surfing because they can't afford a home," Port Stephens councillor Leah Anderson said.

On the 2021 Census night, there were 1,043,776 unoccupied dwellings Australia wide - 5236 of those were in Port Stephens, 1006 in Byron Bay and 6226 in Eurobodalla.

While the ABS data did not specify which were holiday homes, holiday letting site Home to Go identified 5,507 holiday homes within the Port Stephens council area alone.

Ms Anderson was inspired to do a callout to investment property owners after seeing the success of a similar plea from Eurobadalla Shire Council in the South Coast, where mayor Mathew Hatcher wrote a letter asking holiday landlords to consider renting their properties for the next one to two years.

"Even if it's one person that considers it and puts their house on, well that's one extra house on the market for a family," Ms Anderson said.

"They don't have to be five-bedroom dwellings - it could be a granny flat, a one bedroom unit, whatever it is - just to put stock out there that's more affordable for people."

Not all owners want to rent out their properties long-term, but Ms Anderson urged them to consider helping out others doing it tough.

"I don't want to go out upsetting all the people who have got properties just sitting there; they've got every right to just Airbnb it or not rent it out, that is their property and their right," she said.

"I guess if I owned properties that were just sitting there vacant I would struggle to sleep at night knowing that I could put that property on the market and give it to a family to rent or I could just leave it vacant."

The Eurobodalla Shire leads NSW in holiday houses at 25 per cent of all dwellings.

Mr Hatcher was surprised at the response to his letter to landlords.

"I've had comments from WA, Tasmania - it's obviously a national issue," he said.

The council received over 200 calls from secondary homeowners, more than 50 people had since been placed in rental homes, and 10 houses had been added to the social housing stock.

Investors from Canberra and Sydney also offered properties fully furnished and free for three to six months while not in use.

"It's fantastic to have that response come back so immediately from those who have investments here that want to help the community," he said.

Byron Bay Shire mayor Michael Lyon also followed suit after statistics from Airbnb revealed 16 per cent of dwellings in the area were holiday rentals.

He asked Byron residents to consider a different rental proposition.

"Owning a property that is available for long-term rental accommodation is perhaps not as financially lucrative for landlords, but to be able to offer a family, or individuals, permanent, stable accommodation delivers a social benefit that is far more valuable than money," he said.

"The fabric of our community is so stretched now with businesses unable to find staff, people wanting to move to the area to work but not able to afford to live here, or people living here and having to leave because they cannot find affordable, long-term accommodation.

In the World Heritage-listed Blue Mountains west of Sydney, the local council has also called on home owners with investment properties to place them on the long-term rental market.

Australian Short Term Rental Association estimated there were 155,000 private home holiday lets available nationally, with about 70,000 in NSW and 50,000 in Victoria.

This story is part of ACM's Young and Regional series. Read more here.

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