Australia’s short-term rental market is poised for significant growth in 2025, fuelled by increasing travel demand, evolving guest preferences, and a robust recovery of international tourism. Despite challenges such as regulatory changes, the market presents exciting opportunities for hosts, investors, and property managers to thrive. Here’s why the future looks promising:
1. Booming Tourism: A Golden Era for Travel
2025 is shaping up to be a standout year for Australian tourism, with record numbers of travellers expected. The short-term vacation rental market in Australia is expected to experience a compound annual growth rate (CAGR) of 11.5% from 2025 to 2030, according to Grand View Research.
- International travel surge: As borders remain fully open, Australia’s unique attractions, from the Great Barrier Reef to Uluru, will draw millions of tourists, particularly from Asia, Europe, and North America.
- Regional tourism renaissance: Destinations like Cairns, Tasmania, and the Whitsundays are becoming bucket-list hotspots, driving high demand for short-term rentals in these areas.
- Major events to boost bookings: High-profile events like global conferences, music festivals, and sports tournaments (such as international cricket and rugby fixtures) will create booking spikes in cities like Sydney, Brisbane, and Melbourne.
- Wine Tourism: Regions such as Barossa Valley, Adelaide Hills, Clare Valley, Mornington Peninsula and Margaret River continue to see strong demand into short-term accomodation driven by the wine industry
2. Domestic Travel: An Enduring Trend
Australians’ love for exploring their own backyard remains strong, with domestic tourism expected to reach new heights:
- Regional getaways: Smaller towns and rural destinations like Yarra Valley (VIC), Barossa Valley (SA), and the Blue Mountains (NSW) are witnessing unprecedented demand for cosy, unique stays.
- Work-life balance: The rise of remote work means Aussies are embracing “workcations” and midweek getaways, boosting occupancy rates for short-term rentals year-round.
3. The Rise of Regional and Coastal Markets
Regional and coastal areas are emerging as winners in 2025:
- Cairns and tropical north Queensland: Strong interest in eco-tourism and marine life (e.g., turtles and reef adventures) makes this region a magnet for travelers seeking unique experiences.
- South Coast NSW: Properties offering ocean views, nature trails, and pet-friendly options are in high demand.
- Tasmania: A growing favorite for travelers looking for a mix of heritage, nature, and luxury stays.
4. Regulations: Opportunities for Smart Hosts
Although some areas face regulatory tightening, this creates opportunities for compliant and innovative hosts to stand out:
- Smarter investments: Hosts can thrive by focusing on regions with supportive policies, such as Queensland and South Australia.
- Quality over quantity: Regulatory shifts may reduce competition, allowing premium properties to capture higher occupancy and rates.
5. Tech-Savvy Rentals: The Future is Now
Short-term rental properties are evolving to meet guest expectations with advanced technology and thoughtful design:
- Smart home upgrades: Features like keyless entry, automated climate control, and voice-activated systems will delight tech-savvy travelers.
- Perfect work-from-anywhere setups: With remote work here to stay, rentals with fast internet, ergonomic furniture, and peaceful surroundings will command premium prices.
- Sustainable innovations: Eco-friendly properties with solar panels, water-saving systems, and green certifications are becoming top picks for environmentally conscious guests.
6. Guest Preferences: A Shift Towards Unique and Memorable Stays
Travellers in 2025 are prioritising properties that offer exceptional value and unforgettable experiences:
- Experiential travel: Guests crave stays that include unique touches, like homes with panoramic views, farm stays, or properties offering local cultural immersion.
- Pet-friendly options: More travelers are hitting the road with their furry friends, making pet-welcoming properties a standout choice.
- Luxury with a local twist: From coastal villas to vineyard cottages, the demand for luxurious, one-of-a-kind stays is on the rise.
7. Revenue and Occupancy: A Strong Growth Trajectory
Hosts and investors can look forward to higher revenues and stable occupancy rates:
- Seasonal booms: Summer and holiday periods will see properties booked out, with hosts enjoying higher nightly rates.
- Year-round bookings in niche markets: Unique destinations catering to eco-tourism, adventure seekers, and remote workers will experience consistent demand.
- Luxury properties driving growth: High-end travelers are willing to pay premium prices for properties that offer exceptional comfort and amenities.
Why 2025 is the Year to Invest in Short-Term Rentals
With international and domestic travel flourishing, increasing interest in unique experiences, and a focus on sustainability, the short-term rental market in Australia is thriving like never before. Whether you’re a seasoned host or looking to enter the market, 2025 presents countless opportunities to capitalise on this growth.
By embracing emerging trends, investing in guest-centric upgrades, and adapting to local regulations, you can maximise your success and make the most of this booming market. It’s an exciting time for Australia’s short-term rental sector—get ready to ride the wave of opportunity!