The New South Wales state government on Monday approved a request from the Byron Shire council to limit the short-term rents for some properties to 60 days per year to help boost the number of houses available for long-term stays.

The decision comes days after Melbourne introduced the country's first tax on Airbnb-like stays, which the authorities in Victoria said would go towards funding more social housing.

Byron Bay is a beachside destination popular with tourists and celebrities, and was featured in a Netflix reality TV series.

Actor Chris Hemsworth owns a home in the area, but long-term residents and tourist industry workers are struggling to find affordable homes for rent.

"It's well known there has been an undersupply of housing, particularly affordable and diverse housing across the Byron Shire for many years," NSW planning minister Paul Scully said in a statement announcing the policy.

"In the current housing crisis, it's important every available means to boost housing stock for the community is utilised."

The new rules will take effect in Sept. 2024 and only apply to certain areas. Parts of Byron Bay and nearby Brunswick Heads with "high tourism appeal" will continue without caps.

Australia is in the grips of a housing crisis, as decades of low-density suburban sprawl have left many cities short of housing, especially near city centers.

Other global tourist destinations like Berlin and Barcelona have also placed restrictions on short-term accommodation to free up more housing for residents.

(Reporting by Lewis Jackson; editing by Miral Fahmy)