The Berejiklian government will look at finding "common ground" for everyone affected by homesharing sites such as Airbnb as it prepares to regulate the industry for the first time across NSW.
The state government on Wednesday announced it would impose new rules on home owners who let out spare rooms or entire homes but said it was yet to finalise the details of the regulatory framework.
It comes after a NSW parliamentary inquiry into the booming short-term letting market recommended allowing sites such as Airbnb and Stayz to operate, with restrictions or penalties in place for party houses.
NSW Housing Minister Anthony Roberts says the inquiry's recommendations "make sense", but the government needs more community and industry feedback before the restrictions are finalised.
"It's sensible to take time on a complex issue like this, which is why we are releasing an options paper next month," he said in a statement on Thursday.
Only 12 NSW councils currently have rules which allow home owners to let their properties for short stays.
Other councils have cracked down on the practice by fining hosts who let out their accommodation.
The parliamentary inquiry recommended a single set of rules for sites such as Airbnb including allowing homes to be let unless doing so exceeds an "impact threshold".
The report received mixed response, with some resident groups arguing strata managers should retain their power to ban short-term lets which have driven up rents in NSW.
The government says it will consider changing strata regulations "to give owners corporations more powers to manage and response to adverse behaviour" from so-called party houses, and it's urged industry to take a strong self-regulation approach.
"We don't want a holiday accommodation market that's so over-regulated it puts people off coming here but the rights of residents who live near these properties must be considered too," the NSW minister in charge of strata issues, Matt Kean, said.
There are more than 33,000 Airbnb listings in NSW including 17,000 in Greater Sydney alone.
The average Airbnb host in NSW earns $4500 in a year sharing their home, the company estimates.