Short-term renting of residential apartments. Effects of Airbnb in the Icelandic housing market

Lúðvík Elíasson and Önundur Páll Ragnarsson

Economics from Department of Economics, Central bank of Iceland

Abstract: This paper looks at the effects of recent growth in private renting to tourists on the net supply of housing and house prices in Iceland. The growth in private renting to tourists is documented and used to adjust estimates of housing supply. Data on actual bookings of apartments in the capital region of Iceland on Airbnb is used as an indicator for supply of housing to short term tourism rentals. This information is used to estimate the effects of short-term lodging on real house prices in Iceland as well as for making a suggestion for the measure of the residential housing stock. The contribution of the growth in the Airbnb market on real house prices is estimated at 2% per year over the last three years, or about 15% of the total increase in real house prices during that period.

Date: 2018-02
New Economics Papers: this item is included in nep-tur and nep-ure
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