In 2020, internet memes, news reporters and blokes sipping beers quietly in the backyard, shared impassioned commentary about the disaster of a year that was.
We looked forward to 2021, when fires would be extinguished, virus infections minimised, and economy-saving vaccines plentiful.
But thinking the world could ever go back to exactly what it was before Covid, just isn’t realistic.
We’ve learned lessons, changed behaviors and adopted technology in ways we never had before.
For many industries, Covid was a game changer, and holiday letting within the property industry, is no exception.
With new legislation to deal with and cancellations abundant whenever a Premier drops a wall on a border, agents in this space have had to adapt quickly and draw on new strategies and endless resilience to get by.
But Covid is just one of many external influences that has and will continue to challenge holiday letting specialists to evolve.
Covid: the virus that closed borders and slammed doors
While almost every month during 2020, and again during the frequent lockdowns of 2021, newspaper headlines reported dire hotel occupancy rates and petitioned for hopitality financial support, comparatively short-term letting agents barely received a mention.
With no bellhops to pay, no empty foyers to publish pictures of, and three quarters of guests domestic, holiday house occupancy dropped quietly by up to 75%, as families spent more time in their own backyards, during school holidays.
And while an empty home owned by just one person might not seem a big deal, there are still mortgages to pay, and often, an entire sub-industry of property managers behind these addresses that need to make ends meet.
In response to the Covid pandemic, the media reported a strategic shift in accommodation marketing, with a firm focus on ‘staycations’ and promotion to locals.
If clever marketing provided no relief, owners of holiday homes the world over, started to look back to good old-fashioned, long-term rental as the only option for survival.
With rental vacancies so high in Australia, this may have proven a solid option for those who needed it, but again, it depleted inventory for short-term property managers who were already struggling due to decreasing holidaymakers.
Legislation updates are mandating good behavior
During the drama of 2020, not everything was about Covid! Legislation still evolved as it always has, and short-term rentals were on the receiving end of some of these updates.
First and foremost, residential tenancy laws were updated to clarify that they don’t actually cover short-term rentals of 3 months or less.
In April of 2020, legislation relating specifically to short-term rental accommodation changed, so owners corporations can adopt by-laws limiting short-term accommodation in their strata scheme.
They can also ban it if the lot offered for accommodation is not the principal place of residence of the host. If it is the principal place of residence, the host can continue to rent out their spare rooms while they are there, and while they are away.
In mid-December 2020, the NSW Government introduced a mandatory Code of Conduct for the short-term rental accommodation industry. The Code was further adapted in May 2021 to prepare for changes in November 2021.
The NSW Code of Conduct governs booking platforms, hosts, guests and letting agents/facilitators.
Under the Code, letting agents must:
- Make a copy of the Code available to anyone using their services
- Notify the guest or host of a complaint as soon as possible
- Ensure guests and hosts know how to make a complaint (three complaints may result in a five-year ban)
- Must not advertise a premises not listed on the NSW short-term rental accommodation register (from 1 November 2021)
- Cannot rent a premises owned by a host on the exclusion register, or to a guest on the exclusion register
- Keep records of each transaction for 3 years
A facilitator acting on behalf of a host or letting agency must follow the rules that apply to the host or letting agent, respectively.
In November 2021, it will become mandatory for premises to list their dwelling on the NSW short-term rental accommodation register and associated fees must be paid.
Climate Change: keeping your eye on the future
The devastating bushfires of 2019 and 2020, along with floods and erosion, taught us many valuable lessons as a country and drove home just how effective we can be, working together as communities.
One of these lessons, was a harsh reminder that our climate is changing, it is unpredictable and chances are, it will only get worse over years to come.
A report from the Climate Council of Australia has identified that climate change could wipe billions off Australia’s property market in the next ten years, with properties located in waterfront locations, drought-stricken and fire or flood prone areas most at risk.
Many of these locations are, of course, prime locations for short-term and holiday letting.
The ABC went a step further, investigating existing responses to the threat, and noting councils are already preparing for what has been labelled a ‘climate emergency’, by increasing rates for those properties most at risk, which will enable strategic prevention activities.
With fires and flooding working right alongside Covid in 2020 to negatively affect the short-term rental market, and the evidence of pending climate and weather events clear, the ability of the agents to evolve, adapt and advise, will continue to be crucial for those who want to succeed in this space.