Exploring Short-Term Rentals in New Zealand: Impacts & Considerations

17 May, 2023 | Albertina | No Comments

Exploring Short-Term Rentals in New Zealand: Impacts & Considerations


The rise of short-term rental platforms like Airbnb has had a significant impact on New Zealand’s property market. These platforms provide property owners with opportunities to earn extra income by renting out their properties to travelers. However, the increased popularity of short-term rentals has raised concerns about rental affordability, housing availability, and the well-being of local communities. In this blog post, we will explore the pros and cons of short-term rental platforms in New Zealand and discuss their effects on rental affordability, housing availability, and local communities.

Pros of Short-Term Rentals in New Zealand

Short-term rentals offer several advantages for both property owners and travelers. Firstly, they provide property owners with increased income opportunities. By renting out their properties on platforms like Airbnb, owners can generate additional revenue, which can be particularly beneficial in areas with high tourism demand. Secondly, short-term rentals contribute to the growth of the tourism industry and the local economy. Travelers often choose these accommodations for their unique experiences and personalized offerings, boosting tourism-related businesses and local spending. Additionally, short-term rentals provide flexibility for travelers, offering a wide range of accommodation options beyond traditional hotels. Finally, they foster cultural exchange and community integration, as guests have the opportunity to interact with local hosts and experience the destination from a more authentic perspective.

Cons of Short-Term Rentals in New Zealand

While short-term rentals bring certain benefits, they also present challenges and drawbacks. One concern is the potential negative impact on rental affordability. The popularity of short-term rentals can create competition for long-term rentals, driving up prices and reducing availability for local residents. This can exacerbate existing housing affordability issues, particularly in high-demand areas. Moreover, the conversion of properties into short-term rentals can decrease the supply of long-term rental housing, as some owners may prefer the higher income potential of short-term rentals. Consequently, this reduction in housing availability can further strain an already tight housing market. Additionally, the concentration of short-term rentals in certain neighborhoods can disrupt social dynamics and community cohesion, leading to concerns about noise, increased traffic, and the loss of long-term residents. Traditional accommodation providers, such as hotels and bed and breakfasts, may also face challenges in competing with the growing popularity of short-term rentals.

Impact on Rental Affordability in New Zealand

The effect of short-term rentals on rental affordability is a pressing concern. The increase in short-term rental demand can contribute to rising rental prices, making it more difficult for locals to secure affordable housing. The relationship between short-term rental demand and rental affordability is complex, and various factors need to be considered, such as the specific location, supply and demand dynamics, and regulatory frameworks. Potential solutions or mitigating measures could include implementing stricter regulations on short-term rentals, promoting affordable housing initiatives, or encouraging a balance between short-term and long-term rental markets.

Effects on Housing Availability

The availability of long-term rental housing can be affected by the growth of short-term rentals. The conversion of properties into short-term rentals reduces the pool of housing units available for long-term residents, potentially exacerbating the housing crisis. This impact is particularly notable in areas with high tourism-driven rental demand. Governments and local authorities have implemented regulations to address these concerns, aiming to strike a balance between short-term rental opportunities and the availability of affordable long-term housing. Evaluating the effectiveness of these regulatory measures and exploring alternative approaches can help ensure housing availability for both visitors and local residents.

Impact on Local Communities

The impact of short-term rentals extends beyond housing concerns and intersects with the well-being of local communities. The influx of tourists staying in short-term rentals can influence the social fabric and cultural identity of neighborhoods. Positive aspects include increased cross-cultural interactions and economic benefits for local businesses. However, there can also be negative consequences, such as overcrowding, noise disturbances, and strains on community resources. Balancing the benefits and drawbacks for local residents, preserving the character of neighborhoods, and fostering community integration are crucial considerations in the management of short-term rental platforms.

Regulatory Considerations

Regulations play a pivotal role in shaping the impact of short-term rentals on New Zealand’s property market. Current regulations vary across different regions, addressing issues such as registration requirements, property taxation, and zoning restrictions. Assessing the effectiveness of existing regulations and exploring potential policy changes or improvements is vital for mitigating the negative effects and maximizing the benefits of short-term rentals. Striking the right balance between enabling economic opportunities and ensuring the well-being of local communities is a challenge that requires continuous evaluation and adaptation.


In conclusion, short-term rental platforms like Airbnb have significantly influenced New Zealand’s property market. While they offer increased income opportunities, boost tourism, and provide unique accommodation options, concerns about rental affordability, housing availability, and the impact on local communities cannot be ignored. Striking a balance between the advantages and drawbacks of short-term rentals is essential for sustainable growth. By implementing effective regulations, promoting affordable housing initiatives, and fostering community engagement, New Zealand can harness the benefits of short-term rentals while mitigating their potential negative impacts, ensuring a well-functioning property market that benefits both property owners and local residents.