The City of Sydney will investigate banning short-term rentals in select suburbs when rental vacancy rates slip below critical levels.
In a motion passed Tuesday, the council decided to task the chief executive with looking at “opportunities” to ban non-primary residence short-term rentals.
The state government already has a 18-day-per-year cap in law, but tracking which landlords are following the rules is proving difficult.
The inquiries will look at banning short stay accommodation in Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills, Potts Point, Chippendale and Pyrmont, but can pull in other suburbs.
The councillors want more information on making the bans time-limited, such as for two years, and what triggers should be in place to enact a ban, like rental vacancy rates falling below 3 per cent.
“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 formally noted.
“The NSW Government, and the City of Sydney, have a responsibility to take greater action, wherever possible, to address this issue.”
The council directive also seeks better information from the state government about which properties are primary residences for the owner, in an effort to minimise landlords running multiple short-stay properties as a business.
NewsWire has contacted major short-stay platform Airbnb for comment.
In a statement, Stayz government and corporate affairs director Eacham Curry said state government regulation already in place was working.
“Stayz urges the City of Sydney to refrain from implementing bans, day or night caps, limits on guest numbers, or day fees,” Mr 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.”
Stayz backs consistent regulation at state level, and argues council-by-council regulation “can create unnecessary complexity for guests, homeowners, and the community”, he said.
“Local regulation increases costs, time, and resources, deterring the economic benefits.”
The City of Sydney has been gathering information on curbing short-stay rentals for at least three years, when in May 2023 councillors directed council staff to investigate the effect of the sector on rental and housing affordability, as well as tourism.
Following news of the City of Sydney decision on Tuesday, Premier Chris Minns cautioned he would like 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,” Mr Minns said.
Councils in charge of tourism hotspots across the country have instigated various restrictions on short-stay rentals.
Byron Bay has had a 60-day cap since late 2024.
In mid-2025 the City of Busselton, in WA’s southwest, banned new short-stay rentals in new subdivisions and in the suburbs away from the main tourism precincts.
