With oversupply and disillusionment, a decline in the number of Airbnb property owners is predicted
Airbnb is on shaky ground in many parts of the world, and it could be a matter of time before the trend loses favour with South African property owners.
There is already an oversupply of these properties in the country, and many owners have been left disillusioned due to the complexities involved in managing this rental system. For these reasons, real estate professionals predicted a decline in the number of properties purchased for Airbnb rental purposes in South Africa this year.
In some overseas cities, the rise of Airbnb has made it almost impossible for residents to find long-term rental properties at affordable prices, while in others there are contraventions of local by-laws.
Some cases have even ended up in court. In Cape Town, Louisa Theart, spokesperson for the citizen action group One Host One Home (OHOH), says Airbnb has become “notorious” for making outlandish claims about its ability to draw tourists and their dollars to cities around the world, including the Mother City.
However, recent research in the US has found that only 2% to 4% of respondents to several surveys indicated they would have chosen a different holiday destination had they not been able to book their accommodation through Airbnb, Theart says.
“The company claimed to bring billions of rand into the Western Cape economy, but when questioned, admitted this figure was based on the entire spend a tourist would make on their trip to the province, and not only what they spent on accommodation.
“In Cape Town, and we believe these figures are replicated in most tourist destination cities around the world, 68% of listed properties are used solely for transient guest letting, meaning they stand vacant for much of the year and are removed from the long-term rental market.”
Theart says the problems with such letting patterns include:
- Little rental stock available for permanent residents, therefore long-term rentals rocket.
- Permanent residents are pushed further out of town, where they are forced to pay high rentals, which raises rents in adjoining neighbourhoods in a knock-on effect that saw Capetonians experience in excess of 10% rises in rental prices for four years in a row.
- Wealthy property owners benefit disproportionately at the direct expense of the middle class, leaving the poor even farther behind in one of the most unequal cities in the world.
- The security of permanent residents in apartment blocks is severely eroded, as is their peace of mind and lifestyle.
Theart says OHOH has received reports of partygoers who book an Airbnb property, with access to a communal swimming pool and braai area, and then proceed to trash the place. “It is certainly cheaper than booking a party venue, and they simply leave without cleaning up.
“It is clear Airbnb has no interest in addressing the broader societal effects of the misuse of residential property. “This is evidenced by the regulations that lawmakers and policymakers all over the world have enacted to protect their citizens from unaffordable rents.”
Airbnb Inc and Expedia Group Inc’s HomeAway recently failed to persuade a US court of appeals to strike down a Santa Monica law that makes the companies liable for illicit rentals in the southern California beach city.
The Santa Monica ordinance holds the companies responsible for booking rentals of residences that aren’t licensed by the city. The appellate panel agreed with the city that the restriction doesn’t violate the US Communications Decency Act of 1996.
In January, Airbnb and other home-sharing sites won a ruling granting a temporary reprieve from a New York City law that would compel them to turn over renter data, a requirement that threatens to cut their bookings in the city by half.
Airbnb is also fighting Paris, where it faces as much as €12.5 million in fines for allegedly posting illegal advertisements. In November Airbnb sued Boston in the US over a new ordinance that it says would limit short-term home rentals and impose unfair restrictions and financial penalties on the company.