Short-term rentals and housing prices

: a mixed methods study in non-urban regions of Portugal

Abstract

The global proliferation of short-term rentals (STRs), particularly through platforms such as Airbnb, has had a significant impact on the housing market. Current research focuses primarily on urban areas and shows a positive correlation between short-term rentals and rising home values. Especially in inelastic markets, where STR growth is absorbed by price increases and not by an expansion of housing capacity, this correlation leads to problems such
as gentrification, summarized under the phenomenon of Airbnbfication.
Focusing on the case of Portugal, this study fills a research gap by examining the relationship between STRs and non-urban residential real estate markets. It uses a comprehensive dataset covering 11 years in 115 mainland Portuguese cities and advanced regression techniques, including the synthetic difference-in-differences method. The results suggest that an increase in the density of STRs is associated with an increase in house prices. However, there is evidence of a complex relationship, reflecting an inelastic housing market, where the relationship varies with the density of STRs. With these findings, this study makes an important contribution to current research by refining the understanding of the impact of STRs on house prices in non-urban areas and
providing evidence that the phenomenon of Airbnbfication extends to non-urban regions. It encourages policy makers in Portugal and beyond to consider the broader impact of STRs on urban and non-urban housing markets. In doing so, the findings can support the identification of proactive and effective regulatory policies that balance the growth of STRs with the welfare of residents.

Date of Award	19 Oct 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Geraldo Cerqueiro (Supervisor)