Investors steer clear of short-term rentals, survey reveals
By
PIPA Chair Cate Bakos
A recent survey conducted by the Property Investment Professionals of Australia (PIPA) has unveiled a significant trend among property investors: a strong aversion to short-term rental accommodation (STRA). The 2025 PIPA Annual Investor Sentiment Survey, which gathered insights from over 850 investors nationwide, found that more than 90 per cent of respondents have no exposure to STRA, indicating a clear preference for traditional long-term rental investments.
The survey results highlight a growing perception among investors that STRA is fraught with higher risks, requires more work, and is less reliable compared to long-term rental assets. An overwhelming 92.1 per cent of those surveyed reported that none of their properties are rented as STRA, and a mere 1.7 per cent of recent purchasers intended their properties for short-term rental use.
Cate Bakos, Chair of PIPA, commented on the findings, emphasising the cautious approach of experienced investors. “The survey makes it abundantly clear that STRA properties are not on the radar of many investors,” she stated. “More than nine in 10 respondents have no STRA exposure, and the overwhelming majority see them as higher risk and more work.”
The survey also shed light on investor sentiments regarding returns from STRA. Only 22.1 per cent of respondents believed that short-term rentals offered better returns than their long-term counterparts, while nearly half (48.3 per cent) expressed uncertainty. This hesitancy is further underscored by concerns over risks and workload, with more than 60 per cent of participants indicating that STRA carries higher risks of property damage and demands more management effort than long-term rentals.
Over the past five years, a striking 87 per cent of respondents confirmed they had never rented a property out as STRA, reinforcing the minimal role short-term rentals play in serious property investment strategies. Bakos elaborated on the challenges faced by investors, citing rising compliance costs, tenancy reforms, and increased land taxes as existing pressures. “Adding the unpredictability of STRA properties into the mix simply doesn’t stack up for those who are serious about building wealth through property,” she remarked. “Investors are telling us loud and clear that they want to contribute to the long-term rental pool, not chase short-term gains.”
Bakos also addressed the allure of STRA properties, which often boast high nightly rental rates. However, she noted, “They generally don’t align with the fundamentals that underpin successful property investment.”
Beyond the focus on STRA, the survey explored broader investment trends, with property investors identifying Melbourne (40.7%), Brisbane (16.5%), and Perth (9.2%) as the prime locations for investment over the next year. Long-term capital growth prospects (70.3%), low vacancy rates (41.5%), and major infrastructure spending (37.1%) were cited as key motivators for these preferences.
Despite rising costs and legislative reforms, 59.3 per cent of investors expressed optimism about the market, believing that the next 12 months present a favourable time to buy. Bakos highlighted the commitment of investors to providing stable, long-term housing. “This year’s survey shows that most investors are committed to providing stable, long-term housing. With the right government support, they can continue to play a vital role in easing rental pressures,” she said.
However, she issued a cautionary note to policymakers, urging them to support the long-term residential sector. “If governments want to encourage more rental supply, they need to support investors in the long-term residential sector rather than burden them with additional costs and restrictions,” Bakos advised.
The survey results offer a glimpse into the mindset of property investors in Australia, revealing a strong preference for stability and long-term growth over the perceived volatility and uncertainty of short-term rental markets. As the real estate landscape continues to evolve, these insights may guide future investment strategies and policy decisions.