The City of Sydney is currently exploring the possibility of prohibiting short-term rental services, such as Airbnb, during times of low rental vacancy. This initiative comes as the council seeks to address the ongoing housing shortage in the area.

During a recent council meeting, a motion was approved to direct the chief executive to investigate potential methods for implementing such a ban on short-term rentals.

New South Wales (NSW) has already set a limit of 180 days per year for short-term rentals in certain regions, including Greater Sydney. However, the City of Sydney is considering a more focused approach to improve housing availability.

The investigation will initially focus on several neighborhoods, including Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills, Potts Point, Chippendale, and Pyrmont.

Additional suburbs may be included in the inquiry if they experience persistent low vacancy rates in long-term rentals, according to a report by Newswire.

The council has also requested further details on the potential duration of these bans and the specific conditions, such as vacancy rates dropping below three percent, that would initiate a ban.

‘The proliferation of the short-term rental sector was having a negative impact on inner-Sydney neighbourhoods in terms of community connectivity, social cohesion and housing affordability,’ the councillors noted.

‘The NSW Government, and the City of Sydney, have a responsibility to take greater action, wherever possible, to address this issue.’

The City of Sydney council is investigating the introduction of temporary bans on short-term rentals in suburbs with low vacancy rates

The investigation will look at Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills (above), Potts Point, Chippendale and Pyrmont

Popular short-term rental platform Stayz in a statement said existing state regulations were enough to minimise the effects on vacancy rates.

‘Stayz urges the City of Sydney to refrain from implementing bans, day or night caps, limits on guest numbers, or day fees,’ government and corporate affairs director Eacham Curry said.

‘These measures do not address current housing concerns and could jeopardise the value that the short-term rental accommodation sector brings to local communities and their economies.’

He added regulation at the council level ‘can create unnecessary complexity for guests, homeowners, and the community’.

‘Local regulation increases costs, time, and resources, deterring the economic benefits,’ he said.

Several council have already taken local action to limit short-term accommodation, including Byron Bay which introduced a 60-day cap in late 2024. 

Daily Mail has contacted Airbnb for comment.

The City of Sydney began investigating the effects of short-term rentals in May 2023.

The investigation will consider the effects of short-term rentals on vacancy rates and housing affordability

At that time, councillors requested staff investigate how the holiday accommodations impacted the affordability of housing and benefits to tourism. 

Premier Chris Minns on Tuesday said he wants to ‘understand the concurrent impacts on the tourism sector’.

‘We’ve taken steps in some areas – in coastal towns where there’s a big homelessness issue or there’s just a complete lack of housing – to intervene but they’ve been extraordinary interventions,’ he said.