Daylesford’s peak tourism body is calling for the Victorian Government to intervene in the short-stay accommodation market to increase the supply of long-term rentals.

A lack of available and affordable rental properties is preventing struggling tourism and hospitality businesses from attracting new staff to the region.

Tourism leaders say crippling staff shortages are affecting the visitor experience, with businesses opening hours reduced and workers under constant stress.

Daylesford Macedon Tourism chief executive Steve Wroe said he wanted the Victorian Government to investigate the most effective policy options to regulate the short-stay accommodation market.

“The government needs to do some analysis on this and give a report to the industry on what the best options are,” Mr Wroe said.

Outdoor tables, chairs placed under a grapevine, others under a hotel labeled with deckchairs, with the sunny city in the foreground.
Daylesford is a tourist hotspot but businesses are struggling to meet demand due to staff shortages.(ABC News: Danielle Bonica)

A limit on the number of nights short-stay properties can be listed each year and higher fees for short-stay properties are two options that have been implemented in other states.

New South Wales’ Byron Shire, which includes tourist hotspot Byron Bay, is introducing a 90-day limit on short-stay rentals per year in a bid to encourage more landlords to switch properties to long-term rentals.

Mayor Michael Lyon said leaders in Victorian tourist hotspots such as Daylesford should learn from the situation in his town and not “leave it too late” to fix the short-stay property market.

“If there hasn’t been a response from the state government on this issue, change it yourself,” he told ABC’s Talk Hour.

Advisers against interference

Councilors in the Hepburn Shire, which includes Daylesford, voted against considering a new rates system in April which could have seen short-term accommodation owners pay 50 per cent more than the general rate.

A green and maroon sign in the grass next to a road that says Spa Center of Australia Daylesford, with a hand pump in the middle.
Short stay properties make up a large part of the property market in the resort town of Daylesford.(ABC News: Ashleigh Barraclough)

Mr Wroe said it made sense for the Victorian Government to complete a detailed analysis and then work with local governments on the best available options.

He said that whatever regulation is introduced, it must strike a careful balance.

“If you put nightly caps on an Airbnb property or some kind of financial imposition, it will reduce the supply of accommodation,” Mr Wroe said.

“This means that the price of accommodation will potentially increase, which is negative, but a balance needs to be struck as the current situation is not sustainable.

“There is no simple solution, but the solution that needs to be found is a balanced one, so that the supply of housing for the community increases, but we are not limiting tourism by reducing the supply.”

Housing struggles

Thirty-one per cent of dwellings in Daylesford were unoccupied on census night in 2021, higher than the Victorian figure of 11 per cent.

The Ballarat and Central Highlands region, which includes Daylesford, had a rental occupancy rate of 1.5 per cent in July 2022, according to data from the Real Estate Institute of Victoria.

Three to four percent is considered a healthy rental vacancy rate.

The yellow and green foliage is reflected in the calm waters of the lake.
The beautiful Lake Daylesford is one of the draw cards for visitors.(Supplied: Alf Davenport)

The Tourism Industry Council of Victoria is also asking the state government to consider imposing limits on the number of days properties can be advertised on short-stay platforms.

Chief executive Felicia Mariani said Victoria was behind other states such as New South Wales and Tasmania on this front.

A Victorian government spokesman said in a statement it would review the Owners’ Corporations Amendment (Short Stay Accommodation Act) to investigate the “effectiveness of the legislation”.

The Act created laws around disorderly conduct in short-stay accommodation in 2018.

The spokesman said initiatives such as Build-to-Rent and the Affordable Housing Rent Scheme would increase access to rental homes.

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