The new analysis by Infometrics also found population and interest rates are having the greatest influence on rents and house prices.

Commissioned by Airbnb, the study identified a range of factors that could influence and impact rental prices and house prices, including population growth, interest rates, incomes, and STRA numbers (sourced from AirDNA). These factors were analysed to determine the influence any factor had on rents and house prices.

“Our analysis shows that population growth and interest rates had the greatest influence on rental prices in the areas we analysed,” says Infometrics chief executive and principal economist, Brad Olsen.

“When we looked across the range of possible factors that could influence rental prices, STRA only had a limited influence on rents and no real influence on house prices, providing some important evidence to add to the debate about housing, rents, and the STRA sector.

“The housing market fundamentally suffers from a lack of supply, which has caused house prices and rents to rise over time,” Olsen says.

Focusing on the Auckland, Wellington City, Queenstown-Lakes District and Christchurch City territorial authorities, an econometric analysis found the main drivers of rental and house price increases are population growth and interest rates.

Greater influence

“For example, our analysis for Queenstown-Lakes District found that STRA contributes negligibly to monthly rental price increases, with the average amount being an additional 35c/month. Over the period January 2018 to September 2023, population growth influenced around a $101 per week increase in weekly rent, while STRA only influenced $11per week.

“Although people often focus on STRA as a key reason for higher rents and housing costs in some areas, this analysis clearly finds other factors have a much greater influence.”

He says the model looked at house and rental prices over time, relative to changes in other factors that can influence the market. Population came out as the factor that had the greatest influence on rents, with mortgage rates also having a noticeable influence.

“However, when we controlled for all these other variables, our econometric analysis showed that the STRA influence on rents was limited,” Olsen says.

There has been a historic shortage of new properties, coupled with record migration, low borrowing costs and high construction costs.

The analysis also found that before the pandemic, the combination of strong population growth, low mortgage interest rates and insufficient supply of new housing resulted in house price inflation peaking at 15 per cent a year in the June 2016 quarter, compared with a 1.9 per cent a year increase in household incomes.

Tailored solutions

Airbnb says the new analysis demonstrates that if the country is going to solve housing affordability challenges, it needs tailored solutions that get the balance right.

Airbnb New Zealand and Australia country manager Susan Wheeldon says short-term rentals are not the main drivers of housing challenges being faced in cities and towns across the country and it’s important to adopt the right approach to ensure hosting on Airbnb and the economic activity it creates makes communities stronger.

“Even in Queenstown, Airbnb’s influence on annual rental prices is less than the cost of a takeaway coffee. Yet, our economic contribution is significant with Airbnb injecting $2.8 billion into New Zealand’s GDP and supporting more than 22,000 jobs in 2022.

“We want to continue to work with governments and communities to implement consistent nationwide rules as the most sensible way to regulate short-term rentals through initiatives like property registration schemes, so a sustainable approach can be adopted that benefits both communities and industry,” Wheeldon says.