Yes, Airbnb is still profitable in Australia in 2026, but the margin between a property that earns well and one that barely covers its costs has never been wider. A typical Melbourne short-term rental earns somewhere between $25,000 and $58,000 a year depending on whose data you read, while well-run properties in the right suburbs earn considerably more. The variables that decide which side of that range you land on are location, pricing, occupancy and how the property is managed.
This guide covers the actual numbers: what Melbourne properties earn, what it costs to run one, how the 7.5 per cent Victorian short-stay levy fits in, and how Airbnb income compares with a long-term lease on the same property.
Why Airbnb Still Performs in Australia in 2026
The demand side of the equation is in good shape. Visitor spending in Victoria hit a record $46.7 billion in the twelve months to December 2025, according to Tourism Research Australia data. Melbourne held its position as the top destination in the country for overnight interstate leisure travellers, with 3.5 million visitors staying a combined 13 million nights and spending $5.9 billion in the city.
Those 13 million nights need beds. Hotels take a large share, but travellers booking for families, groups, longer stays or anything with a kitchen keep choosing short-term rentals, and Melbourne’s events calendar concentrates that demand into predictable spikes. The Australian Open, the Grand Prix, AFL finals and the spring racing carnival all push nightly rates well above their normal levels for hosts who price properly.
Supply has grown too, which is the part most “is Airbnb still worth it” articles skip. More listings means average figures get dragged down by properties that are poorly presented, badly priced or rarely available. The market rewards properties run like small accommodation businesses and punishes the set-and-forget ones, and that gap shows up clearly in the numbers below.
How Much Can You Actually Earn? Melbourne Airbnb Revenue Data
Published market averages for Melbourne vary a lot depending on methodology. AirDNA puts the citywide average at 55 per cent occupancy and $181 a night as of mid-2026. Airbtics, which filters differently, estimates the average Melbourne host earned about $58,000 in the year to January 2026, at a $228 average nightly rate and 68 per cent occupancy. The gap between those two figures tells you something important: averages include hundreds of part-time and poorly optimised listings, so your property’s result depends far more on how it is run than on the citywide mean.
The table below shows typical performance ranges across the inner-Melbourne micro-markets where we manage properties.
Melbourne Airbnb revenue by area, based on properties currently under Holiday House Manager management
| Area | Typical property | Nightly rate range | Occupancy range | Indicative gross revenue per month |
|---|---|---|---|---|
| CBD, Southbank, Docklands | 1-2 bedroom apartment | $190-$260 | 70-85% | $4,200-$5,800 |
| Inner north (Fitzroy, Carlton, Brunswick) | 2 bedroom apartment or terrace | $220-$320 | 70-85% | $5,000-$7,500 |
| Bayside (St Kilda, Elwood, Port Melbourne) | 2 bedroom apartment | $210-$300 | 65-80% | $4,500-$6,800 |
| Inner east (South Yarra, Prahran, Richmond) | 2 bedroom apartment or townhouse | $240-$350 | 70-85% | $5,500-$8,200 |
Two notes on reading this table honestly. First, these are gross booking revenue figures before any costs, which the next section deals with. Second, the occupancy ranges here sit well above the citywide averages because they describe actively managed, professionally photographed, dynamically priced listings. A property that is self-managed around a full-time job will usually land closer to the AirDNA citywide figure of 55 per cent, and sometimes below it.
Seasonality matters too. December and January are consistently the strongest months across our portfolio, and May and June the softest. A property that earns $7,000 in January might earn $3,500 in May. Annual figures smooth this out, but your cash flow will not, so plan for it.
What Does It Really Cost to Run an Airbnb in Melbourne?
Gross revenue is the number everyone quotes and nobody banks. Here is where the money actually goes, using a worked example: a two bedroom Southbank apartment at a $240 average nightly rate and 75 per cent occupancy, which comes to roughly $65,700 in gross accommodation revenue a year.
| Expense | How it works | Approximate annual cost |
|---|---|---|
| Cleaning | Charged to guests as a cleaning fee on most bookings, so largely cost-neutral to the owner, but turnovers between short stays add up | Mostly guest-funded |
| Airbnb host service fee | Around 3% of the booking subtotal on the standard split-fee model | ~$2,000 |
| Victorian short-stay levy (7.5%) | Collected from guests and remitted by the platform on Airbnb and Booking.com bookings, so it does not come out of your payout directly, but it raises the guest’s total price and squeezes your pricing headroom | Indirect (see below) |
| Utilities and internet | Owner pays, unlike a long-term rental where the tenant does | ~$3,600 |
| Linen and consumables | Sheets, towels, coffee, cleaning supplies | ~$1,500 |
| Insurance | Specialist short-stay landlord insurance, not standard landlord cover | ~$1,800 |
| Maintenance and repairs | Higher wear than a long-term rental due to turnover | ~$2,000 |
| Professional management (15%) | Our flat fee, covering guest communication, pricing, listing optimisation, cleaning coordination and maintenance callouts | ~$9,860 |
Net that out and the Southbank example lands at roughly $45,000 to $47,000 a year, or about $3,700 to $3,900 a month, before ownership costs like mortgage interest, council rates, owners corporation fees and land tax, which you would pay regardless of how the property is used.
The short-stay levy deserves its own sentence because it is widely misunderstood. The levy is 7.5 per cent of the total booking fee, applies to stays under 28 days, and has been in force since 1 January 2025. For bookings made through platforms like Airbnb and Booking.com, the platform collects it from the guest and remits it to the State Revenue Office, so hosts do not lodge anything themselves. The real cost to hosts is competitive: guests see a higher total price, which puts mild downward pressure on the nightly rates the market will bear. For a full breakdown, read our guide to Victoria’s short-stay levy.
If you want to understand where the management fee fits against the alternatives, we have published a separate breakdown of what Melbourne Airbnb managers typically charge.
Airbnb vs. Traditional Renting in Melbourne
The comparison most owners actually want is simple: what would this property earn on a lease instead?
Melbourne unit rents hit a record $600 per week in the March 2026 quarter, according to Domain. On a comparable two bedroom inner-city apartment, that is $31,200 a year gross. Deduct a standard property management fee of around 6 per cent plus a letting fee, allow something for maintenance and vacancy between tenants, and a realistic net figure is $27,000 to $28,500 before ownership costs.
The Southbank Airbnb example above nets $45,000 to $47,000 on the same basis. That is a difference of roughly $17,000 to $19,000 a year in favour of short-stay, and it is consistent with what we see across the portfolio: a well-located, well-run Melbourne Airbnb typically nets 40 to 70 per cent more than the same property on a lease.
The trade-offs are real, though. Long-term rent arrives every week whether it is May or January. Airbnb income is lumpy, sensitive to seasonality and events, and depends on the property being actively worked. If you value certainty above return, a lease is the rational choice. If you can absorb month-to-month variation, the numbers favour short-stay in most inner-Melbourne locations. We have written a longer comparison in our guide on whether to self-manage or hire an Airbnb manager in Melbourne, which covers the middle path as well.
Is Airbnb Legal in Melbourne? Rules, Registration and the Short-Stay Levy
Short-stay accommodation is legal across Melbourne, but the compliance picture changed meaningfully from 1 January 2025 and it pays to get it right.
The short-stay levy. Victoria charges a flat 7.5 per cent levy on the total booking fee for stays of less than 28 consecutive days, under the Short Stay Levy Act 2024. The total booking fee includes cleaning fees and GST. Properties that are the owner’s or renter’s principal place of residence are exempt, as is commercial accommodation like hotels and motels. Platforms collect and remit the levy on bookings made through them; owners taking direct bookings must register with the State Revenue Office and lodge returns themselves. The SRO publishes the authoritative detail on its short-stay levy page.
Council rules. There is no statewide registration scheme for short-stay properties, but individual councils can impose their own requirements, and owners corporations gained powers to restrict short-stay use in their buildings. Before listing an apartment, check the owners corporation rules first. It is the single most common compliance surprise we see during onboarding.
Tax. Airbnb income is assessable income, and expenses are generally deductible in proportion to the property’s short-stay use. GST does not usually apply to residential short-stay income, but this is one to confirm with your accountant rather than a blog post.
None of this makes Melbourne a hard place to operate. Compared with Sydney’s 180-night cap for non-hosted properties, Victoria’s settings are straightforward: pay the levy, respect your building’s rules, declare the income.
What Influences Airbnb Profitability?
Six factors separate the properties earning $70,000 a year from the ones earning $25,000. All six are within an owner’s control.
Location. Walkability to transport, food and a recognisable attraction matters more than prestige. A tidy two bedroom apartment 200 metres from a tram stop in Brunswick will often out-earn a grander property that requires a car. Within our portfolio, properties within a ten minute walk of a train station or tram corridor book measurably faster than those without.
Property type and setup. Guests pay for beds and bathrooms, not floor space. A two bedroom apartment that sleeps four comfortably typically produces a better return on value than a large house sleeping the same number. Fast WiFi, a proper workspace and a dishwasher are the three amenities guests filter for most.
Photography. Professional photography is the highest-return $400 an owner can spend. Listings are chosen from a thumbnail on a phone screen, and dark or cluttered photos suppress bookings no matter how good the property is. We re-shoot listings after any meaningful refresh for exactly this reason.
Pricing strategy. A static nightly rate leaves money on the table in both directions: too cheap during the Australian Open, too dear on a wet Tuesday in June. Dynamic pricing that responds to demand, lead time and events typically lifts revenue 10 to 20 per cent over a fixed rate, which is why every property we manage runs on it.
Multi-platform distribution. Airbnb has the largest audience, but Booking.com brings a different guest profile, including more international and midweek corporate travellers. Listing on both, with a synchronised calendar, fills gaps a single platform leaves. Direct bookings from repeat guests are the bonus layer on top.
Guest experience. Reviews compound. A listing holding a 4.9 rating ranks higher in search, converts better and can charge more than an identical property at 4.5. Fast responses, spotless cleans and accurate listings are unglamorous work, but they are what the rating is built from.
The Role of Professional Airbnb Management
The honest way to assess a manager is return on the fee, not the fee itself.
Our management fee is a flat 15 per cent of accommodation revenue, with no setup costs. For that to make sense, management has to add more than 15 per cent in performance, and in practice it usually does, through three mechanisms: dynamic pricing (typically worth 10 to 20 per cent on its own), higher occupancy from faster response times and better listing placement, and multi-platform distribution that a self-managing host rarely has time to run properly. Properties we manage average around 85 per cent occupancy after their first six months, against a citywide average that sits somewhere between 55 and 68 per cent depending on the data source.
There is also the cost nobody prices until they feel it: time. Self-managing a busy Melbourne listing means guest messages at 11pm, coordinating cleaners across changeovers, and handling the lockout call on Christmas morning. Some owners genuinely enjoy that work. Most discover they do not, usually around month three. If you are weighing it up, our self-manage or hire a manager guide works through the decision in detail, and our piece on managing an Airbnb remotely covers the interstate and overseas owner scenario.
Frequently Asked Questions
Is Airbnb still profitable in Melbourne in 2026? Yes. Market data puts average Melbourne host earnings between roughly $25,000 and $58,000 a year depending on the source, and actively managed inner-city properties routinely net more than the same property would on a long-term lease. Profitability depends heavily on location, pricing and management quality rather than the market average.
How much does the Victorian short-stay levy cost hosts? The levy is 7.5 per cent of the total booking fee on stays under 28 days. For bookings made through Airbnb or Booking.com, the platform collects it from the guest and remits it, so it does not come out of your payout directly. Its practical cost is a slightly higher headline price for guests.
Is Airbnb more profitable than renting long-term in Melbourne? Usually, yes, for well-located inner-city properties. Our worked example shows a two bedroom apartment netting $45,000 to $47,000 on Airbnb against roughly $27,000 to $28,500 on a lease at Melbourne’s median unit rent of $600 a week. The trade-off is income variability and more operational work.
How much does an Airbnb manager cost? Melbourne full-service managers typically charge between 12 and 25 per cent of booking revenue, sometimes with setup or onboarding fees on top. We charge a flat 15 per cent with no setup costs.
Do I need council approval to run an Airbnb in Victoria? There is no statewide registration or approval scheme, but individual councils can set their own rules, and owners corporations can restrict short-stay use in apartment buildings. Check your owners corporation rules and your local council’s position before listing.
Does the levy apply if I rent out a room in my own home? No. Stays in a property that is the owner’s or renter’s principal place of residence are exempt from the short-stay levy.
The Bottom Line
Airbnb remains profitable in Australia in 2026, and Melbourne is one of the stronger markets in the country to do it, with record visitor spending and the busiest events calendar of any Australian city. The averages hide the real picture: well-located, professionally run properties earn 40 to 70 per cent more than a long-term lease, while neglected listings sink below it once costs and the levy’s pricing pressure are counted.
If you own a property in Melbourne and want to know what it would actually earn under management, we will give you a straight answer based on comparable properties we already run, not a calculator estimate. Get in touch for a free, no-obligation appraisal, and we will come back to you with real numbers within two business days.
