Premier Gladys Berejiklian is being called on to consider giving strata residents and owners corporations the power to ban short-term letting of apartments through sites like Airbnb, arguing the practice is driving up rents.
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A day after Ms Berejiklian declared that she would prioritise the issue of housing affordability, the Owners Corporation Network (OCN) said a crackdown on short-term letting was "the first, easiest and cheapest step" she could take.
The OCN says the number of rental properties being made permanently available for short-term letting is driving up rents.
The claim is backed up by recently published research by the University of Sydney's Urban Housing Lab that showed the number of Airbnb rentals had doubled year on year since 2011 to reach about 15,648 in January 2016.
The article by professors Nicole Gurran and Peter Phibbs shows a third of Airbnb listings in greater Sydney "are held by owners of multiple properties".
"Frequently listed Airbnb rentals provide lucrative income exceeding permanent rental income for Greater Sydney by more than $600 per month," it says.
Professor Gurran told Fairfax Media: "In popular tourist areas it's clear that the number of listings regarded as permanently available is squeezing rental supply, which would have an impact on rents."
The research followed the launch of a NSW parliamentary inquiry into the adequacy of the regulation of short-term holiday letting.
Its report said prohibition "is a last resort" but that "incremental steps should be taken to increase the powers of strata residents and owners corporations to influence the use within their buildings".
The government is due to respond by April.
The OCN's Stephen Goddard acknowledged that allowing owners corporations to ban short-term letting would result in fewer apartments for rent via Airbnb but said "that's not necessarily a bad thing".
"Some strata communities will want short-term letting allowed, and others will not – and what we want is a choice and a say in the decision," Mr Goddard said.
An Airbnb spokesman said its listings make up less than 1 per cent of Sydney housing.
He said the "overwhelming majority" of hosts list the home in which they live for an average of 23 nights per year "while they're out of town" to earn "a modest $3300".
"We look forward to working with Premier Berejiklian and her government to ensure NSW achieves fair and progressive home-sharing rules," he said.
Ms Berejiklian said: "As I said yesterday, housing affordability will be a key issue for this government under my leadership.
"We are considering our options to make a difference but I won't be ruling anything in or out at this stage."
