Home to celebrities and yoga instructors, Bryon Bay in northeast NSW has become a coastal battleground over spiralling property prices amid a housing crunch.
The Byron Shire placed a 60-day cap on non-hosted short-term rental accommodation (STRA) in September 2024, in a bid to reduce prices for locals competing with holiday-makers.
But Airbnb, whose whole business model relies on hosts opening up their homes to travellers, says a year on from the experiment there are fewer long-term rental listings available.
"Targeting short-term rentals is not a silver bullet to deal with the housing challenges in Byron Bay," the firm's Australia and New Zealand manger Susan Wheeldon said.
"(It) distracts from the real need to build more homes."
Commissioned by Airbnb, research published on Monday by Frontier Economics shows rental prices have risen to their highest ever levels.
The 30-page report found the average weekly rent increasing by seven per cent year-on-year, from $1112 to $1193.
By comparison, Sydney's median house rent is $780 a week.
Airbnb says the council relied on "inflated data" to argue its case about short-term rentals eating up the rental market and driving up prices.
The council said it was about 35 per cent but the San Francisco-headquartered accommodation behemoth says short-term rentals represent only about 11 per cent of total properties in the area.
Relying on government data, Airbnb noted there were 1004 registered non hosted short-term rental properties in the Byron Shire.Â
But data from Inside Airbnb, a rental watchdog groups, says it is closer to 2200 listings.
Local Greens MP Tamara Smith is a long-time vocal advocate of reining in holiday letting.
The council was given the green-light in 2023 from the NSW Labor government after she lobbied it to heed the state's Independent Planning Commission to impose caps.
"The housing crisis in our region was a slow build over a decade where we've seen gentrification in Byron Bay," she told AAP.
One year wasn't enough for any tangible results to be yielded in fixing the soaring prices, she said.
"These are residentially zoned areas and they need to be for residents."
But Ms Smith bristled at suggestions that it was merely a housing supply issue, describing it as a "complete farce".
"Supply alone is not going to fix it because there is no deterrent to stop developers from turning properties into short-term rental accommodation," Ms Smith noted.
"If we didn't have this cap, then whole areas could all become like the Truman Show - just 100 per cent short-term rental accommodation."
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