Airbnb drives up rent and property prices, study
Love or hate it, Airbnb has taken off around the world.
While some think it’s a great way for homeowners to increase their income, others say the home-sharing economy is driving up property prices.
A new research paper from UCLA, USC, and the National Bureau of Economic Research looked at rental prices, home price and Airbnb data in America from 2012-2016 and their findings were exactly as people feared.
"Critics of home-sharing argue that it raises housing costs for local residents, and we find evidence confirming this effect," the authors wrote in their study.
In fact, the results showed a 10 per cent increase in Airbnb listings led to a 0.42 per cent increase in area rents and a 0.76 per cent increase in house prices in the US.
"Our results suggest that Airbnb growth can explain 0.27 per cent in annual rent growth and 0.49 per cent in annual house price growth from 2012 to 2016," they said. "These effects are modest, but not trivial: the annual rent growth from 2012 to 2016 was 2.2 per cent and the annual house price growth was 4.8 per cent."
However, it’s not all bad. Researchers said if you’re renting your home or a room in your house while visiting friends for the weekend, it’s not going affect the rental economy. It’s when landlords choose to put their places on Airbnb instead of renting them out long term. This leaves people competing over fewer listings.
Researchers concluded that regulations could be the answer.
"In our view, regulations on home-sharing should (at most) seek to limit the reallocation of housing stock from the long-term to the short-term markets, without discouraging the use of home-sharing by owner-occupiers.”
