The City of Sydney Council is considering banning short-term rentals in 11 inner-city suburbs, but a prominent Airbnb management expert says the focus should be on enforcing existing laws rather than penalizing compliant homeowners. Krystina Cleary, founder of Cleary & Co, argues that the debate linking Airbnb to the housing crisis overlooks a systemic enforcement gap.
Data from the City of Sydney shows 5,454 active short-term rental listings within the local government area, but only 2,468 are officially registered under the NSW Short-Term Rental Accommodation framework. This leaves more than 3,000 listings operating outside legal requirements. "Without registering, you are either impacting short-term letting options or claiming to be exempt for whatever reason, and this should be picked up by the Department of Planning who are supposedly auditing this process," Cleary said. "It is a pointless exercise to make credible providers in the industry jump through hoops, yet unscrupulous operators can bypass the system entirely."
The City of Sydney motion, passed on 28 April 2026, directs the council's CEO to investigate restricting non-primary-residence short-term rentals in suburbs including Darlinghurst, Surry Hills, Pyrmont, Potts Point, and Chippendale, where rental vacancy rates are below 3 percent. However, Cleary notes that short-term rental listings represent only 0.9 to 1.6 percent of Sydney's total housing stock, challenging the narrative that Airbnb is a primary driver of the housing crisis.
Cleary emphasizes that affected homeowners are often not large-scale investors but individuals using their properties to fund retirement, visit family, or cover medical expenses. Under a ban, these owners would be forced into long-term rentals that cap income and restrict personal use. "With the current economic uncertainty, who does this actually serve? It did not work in Byron Bay, and it will not work in Sydney," she said.
NSW law already caps non-hosted short-term rentals in Greater Sydney at 180 days per year, with hosted properties having no cap and bookings of 21 or more consecutive nights exempt. Cleary argues that enforcing these existing rules would be more practical and equitable than new bans. She also predicts a shift toward quality in the market, with poorly presented properties and unscrupulous operators having no long-term staying power.
The investigation is ongoing, and no ban has been implemented. For property owners assessing their options, Cleary advises a personal decision based on individual circumstances, offering impartial advice through her agency, which manages over 100 properties across Sydney's inner suburbs.
