As Australia continues to face a growing housing crisis, policymakers are considering tighter restrictions on short-term rental accommodations (STRA), such as Airbnb. One common approach is the introduction of night caps, limits on the number of nights a property can be rented out each year.
The assumption is that these measures will push property owners to switch from short-term rentals to long-term leasing, thereby easing rental shortages. But new research paints a different picture.
A YouGov survey commissioned by Airbnb reveals that 88% of Australian Airbnb hosts would not put their property on the long-term rental market if night caps were introduced or lowered. This raises an important question: are nightcaps the solution, or are they merely a feel-good policy that misses the mark?
Let’s dive into the findings and what they mean for Australia’s housing policy.
Most hosts gave practical reasons for not making the switch. For many, the property in question is their primary residence, second home, or family holiday getaway. These homes are often only available for part of the year or not suitable for long-term tenancy due to size, location, or the way they’re maintained. In other words, these are not investment properties sitting idle, they’re personal spaces used and cherished by their owners.
More than 40% of hosts surveyed indicated that, if faced with Night Caps on Airbnb, they would rent their home for the maximum allowed number of nights and then leave it empty. This outcome not only fails to increase the supply of long-term rentals but also reduces availability for short-term visitors, which could negatively affect local tourism and event-based economies.
The demographic data adds another layer to the conversation. The majority of Airbnb hosts in Australia are women (63%), and 77% of them manage just one whole home property. Many rely on the income from hosting to manage household expenses or supplement their cost of living. For these hosts, Night Caps on Airbnb would mean a significant financial loss without offering any viable alternative.
Experts have weighed in on the issue as well. Paul Smith from YouGov noted that the most likely response to nightcaps would not be converting homes to long-term rentals, making the policy ineffective in achieving its goal. Michael Crosby, Airbnb’s Head of Public Policy for Australia and New Zealand, added that similar restrictions in places like New York have failed to improve housing affordability and only made travel more expensive for visitors.
Additional insights from the University of Canberra support this argument. Their 2025 study found that property owners rarely switch between short-term and long-term models. Many homes listed on Airbnb are unavailable for year-round rental because owners use them personally at different times of the year. Independent research from Urbis further shows that short-term rentals make up only 1% to 2% of Australia’s total housing stock and do not have a consistent impact on housing affordability.
Even financial penalties appear to fall flat. The YouGov research found that only 5% of hosts would convert to long-term rental if levies or taxes were introduced. Over 60% said they would continue using their home as a short-term rental, citing both the economic necessity and the value of providing flexible, family-friendly accommodations.
Beyond individual homeowners, Night Caps on Airbnb could have wider negative effects. Cities and towns across Australia rely on short-term stays to support tourism during major events like the Sydney Marathon, AFL Grand Final, and The Ashes. Cutting the supply of short-term rentals without increasing hotel capacity could damage the local economy and strain community resources.
The takeaway here is clear: While housing affordability is a serious concern, Night Caps on Airbnb are unlikely to offer a real solution. They may sound like a quick fix, but the data suggests they won’t increase long-term rental availability and may even hurt everyday Australians who depend on short-term hosting for financial support.
What Australia needs instead is a more balanced approach, one that involves building more housing, implementing fair and effective regulations, and working with platforms like Airbnb instead of against them. By doing so, we can ensure that short-term rentals continue to benefit both travellers and the communities that host them without compromising the availability of affordable long-term housing.
