More property investors are considering buying properties such as baches to rent on Airbnb. File photo. Photo: Te Ara Encyclopedia of New Zealand
Property investors looking for a way to spread the risk on their portfolio may be turning in increasing numbers to short-term rentals, one investor group suggests.
Data from analytics firm AirDNA shows travelling New Zealanders are returning to the site, post-Covid.
There were 73,513 properties listed on the site in 2024, just down on the 77,457 of 2019. In the intervening years, the number had dropped as low as 56,000.
The average daily rate being charged in December was $290.47, up from $195.74 in 2019.
There is some variation across the country - AirDNA said Auckland only had occupancy of 55.7 percent across its 7954 properties available in December. Occupancy had been as high as 75 percent previously.
Christchurch had occupancy of 65.7 percent across is 2989 properties, and Wellington 59.3 percent across 3495.
But Auckland was commanding the highest daily rate at an average of just more than $290.
Auckland Property Investors Association general manager Sarina Gibbon said it had been notable in recent times that more of her members were considering buying properties to rent on Airbnb.
"There are fewer obligations on landlords... I'm seeing it especially from established landlords with reasonably sized portfolios who see this as a high-cashflow higher-risk game with the trade-off of less obligation to the tenant."
She said the market seemed to be dominated by professional property managers who specialised in short-term rentals, so it would not necessarily mean more work for the property owners.
But they might need to prepare for more vacancies, she said.
Ed McKnight, an economist at Opes Partners, said the yield on an Airbnb property could be up to 10 percent or even slightly more, compared to a typical rental yield of 3.9 percent nation-wide in the residential market, according to Corelogic.
He compared annual revenue from Airbnb from AirDNA data to the average Corelogic house value.
He said people thinking about buying a property to Airbnb might assume they should focus on areas like Queenstown.
But it was not generating the highest yield.
"The average Airbnb income appear to be around $130,000 a year. The average property in Queenstown costs just over $1.6 million, which implies a 7.96 percent gross yield.
"But it appears that MacKenzie District might have overlooked opportunities. The average Airbnb income is $74,700 against an average house value of $692,710. That implies a gross yield of 10.78 percent."
He said Westland was second place to Mackenzie when it came to Airbnb yield, with annual revenue of $47,900 and an average house price of $457,692.
Ruapehu was third and Rotorua fourth.
At the other end of the table were places like Western Bay of Plenty and Upper Hutt, with yields of less than 3.5 percent.
"Perhaps properties in Waimakariri and Upper Hutt tend to be made available for only part of the year."
Auckland was well down the list, too, with a yield of just under 4.3 percent.
McKnight said that could be in part due to the type of property that was being let.
"The average property value in Auckland is high. But, the average Airbnb might be an inner city apartment, that is cheaper. So the average property in a city is often not the average Airbnb in a city.
"The yield values are more an indication of where to spot opportunities first, rather than a definitive 'invest here, don't invest there'."
AirDNA director of economics Bram Gallagher said demand had built again after the Covid slump but it was expected that March would bring a seasonal decline before the school holidays helped a recovery in April.
He said there had been a clear trend of people moving to booking larger houses, particularly for holidays with family groups.
Covid had prompted a significant drop in the popularity of shared houses or shared rooms.
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