The number of houses and apartments listed as short term accommodation is rising in Ballarat in response to a growing visitor market, while the city’s rental vacancy rate has hit a record low.
But Ballarat real estate agents say the number of properties in Ballarat converted to short term accommodation is too small to notably impact the rental market.
More than 300 homes or apartments in Ballarat are advertised for short term stays on accommodation-sharing site Airbnb and more than 60 are listed on holiday rental site Stayz.
There will be an increasing need for accommodation like this with upcoming construction.Gavin James, Lake Wendouree Luxury Apartments
While Ballarat real estate agents say there have been few landlords pull their property from the long-term rental market to convert to short term accommodation, they had noticed some buyers were purchasing homes with the intention to operate in the short term stay market.
Trevor Petrie from Trevor Petrie Real Estate says he believes more people will buy properties for that purpose in coming years with growing tourism and construction, but it won’t take a high percentage of properties out of the rental market.
Ballarat resident Sandi Murphy’s investment property was a long-term rental before she renovated and converted it to short term accommodation.
She said the decision was based on an improved financial return from short stay bookings.
“I was getting $220 a week rent and now I rent it out for $125 a night with different discounts over a period of time depending on how long they stay,” she said.
“Although I am paying power, water and gas it still covers itself completely as with rent it didn’t.”
In the three years her property has been listed on Airbnb and Stayz, Ms Murphy says she has seen an increasing demand for short stay accommodation and expects it to increase with the upcoming construction boom in and around Ballarat.
“For the first year I had 75 per cent occupancy rate, the second year I had 65 per cent occupancy rate and this year I would be at about 90 per cent occupancy rate because I had a three month stay with workers from Powercor,” she says.
Lake Wendouree Luxury Apartments owner Gavin James purchased apartments in Webster Street in 2011 and Grove Street in 2014 that had been previously been used as long-term rentals. He converted them to short-term holiday accommodation after extensive refurbishment.
He says the Grove Street apartments have been particularly popular with executives, legal professionals and visiting medical practitioners booking stays of up to six months.
“There will be an increasing need for accommodation like this with upcoming construction,” he says.
“I think Ballarat over the next three to five years will be an extremely busy city with a large contingent of construction workers and associated service providers wanting to find accommodation in Ballarat for the duration of their work programs.”
Ballarat’s rental vacancy rate hit a record low of 0.7 per cent in November, with the December rate expected to be released in coming weeks.
But Ballarat Real Estate general manager Allister Morrison said many investors were buying in Ballarat with the intention of being a ‘traditional’ landlord.
“Many investing in Ballarat are out of town people who don’t have the capacity to service the properties (for short term accommodation) like someone who lives locally,” he said.
“It will be interesting closer to end of January when university students start looking for places to see how low the rental vacancy goes.
“I think what is driving it (the low rate) is quite a number of landlords may have sold property because of the strength of the market in terms of sales and perhaps those properties have been purchased by owner occupiers. Also Ballarat is growing population wise.”