The Short-Term Rental Shift: Is Airbnb Still Profitable in Australia in 2025?

The golden age of Airbnb in Australia might be evolving, but it’s far from over. With new Airbnb regulations in Australia for 2025 shaking up the market, savvy investors need to adapt their strategies to stay profitable.

If you’re wondering whether short-term rentals are still worth it, this guide will break down:
✅ The latest 2025 regulatory changes and what they mean for hosts
✅ Which markets still offer strong returns despite tighter rules
✅ Proven strategies to maximize your Airbnb profits this year
✅ Alternative options if traditional STRs no longer work for you

Let’s dive into the state of Australia’s short-term rental market and whether it’s still a smart investment.

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1. The New Airbnb Regulations in Australia (2025 Update)

2025 is bringing tighter restrictions across multiple states. Here’s what you need to know:

NSW: Caps & Registration Requirements

• 90-day annual cap in Greater Sydney (unless exempt)
• Mandatory registration for all short-term rentals
• Higher council rates for investment properties used as STRs

Victoria: New Tax & Zoning Rules

• 7.5% short-stay levy on bookings (from 2025)
• Local councils can ban Airbnbs in certain zones

Queensland: Tougher Compliance

• Body corporate power to restrict Airbnbs in some buildings
• New safety standards (fire alarms, emergency exits)

What This Means for Hosts

✔ Higher costs (taxes, compliance, registration)
✔ More competition for limited rental days in capped areas
✔ Potential for better returns in regional markets

🔗 Check your suburb’s rules: Airbnb Regulations by State (2025) (internal link)

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2. Is Airbnb Still Profitable in 2025? (The Data Doesn’t Lie)

Despite the crackdown, some markets are still thriving. Here’s where Airbnb makes sense in 2025:

Best-Performing Airbnb Markets (2025 Forecast)

Location	Avg. Occupancy	Avg. Nightly Rate	Why It Works
Byron Bay	68%	$450	Tourism rebound, luxury demand
Gold Coast	72%	$320	Year-round events, international visitors
Margaret River	65%	$380	Wine tourism, remote work appeal
Tasmania (East Coast)	60%	$290	Scenic escapes, low regulation

Source: AirDNA Australia Report (external link)

Markets to Avoid in 2025

⚠ Melbourne CBD (oversupply, 7.5% tax)
⚠ Sydney (capped areas) (90-day limit hurts profits)
⚠ Perth (low tourism demand) (better for long-term rentals)

📌 Find high-growth suburbs: Best Airbnb Locations for 2025 (internal link)

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3. How to Make Airbnb Work in 2025 (Even With Stricter Rules)

Strategy #1: Target “Uncapped” Regional Areas

• Coastal towns (e.g., Port Stephens, Sunshine Coast)
• Ski destinations (e.g., Jindabyne in winter)
• Emerging wine regions (e.g., Orange, NSW)

Strategy #2: Upgrade to Premium Listings

• High-end properties earn 2-3x more than budget stays
• Unique stays (tiny homes, eco-cabins) get more bookings

Strategy #3: Diversify Beyond Airbnb

• List on Stayz, Booking.com, VRBO
• Offer corporate mid-term rentals (30-90 day stays)

🔗 Get our2025 Short-Term Rental Profit Blueprint** (internal link)

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4. The Future of Short-Term Rentals in Australia

What’s Next?

• More councils imposing restrictions
• Higher taxes for investment properties
• A shift toward “professional” Airbnb hosts (not casual renters)

Should You Sell or Adapt?

If you’re in a high-regulation area, consider:
✔ Converting to long-term rentals
✔ Selling and reinvesting in regional markets
✔ Switching to luxury or niche rentals

📌 Need expert advice? Book a Free STR Strategy Call (internal link)

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Final Verdict: Is Airbnb Still Worth It?

Yes, but only if you:
✅ Choose the right location (avoid capped zones)
✅ Optimize for premium guests (not budget travelers)
✅ Stay compliant with 2025 regulations

For some investors, long-term rentals or commercial property may now be a safer bet.

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Need Help Navigating the 2025 Airbnb Market?

At Real Estate Science Fund, we help investors adapt to changing short-term rental laws while maximizing returns. Get in touch today for a personalized strategy!