Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona

2019 edition

Rodrigo Martinez

Peer-to-peer platforms such as Airbnb have recently entered the market thanks to the development of new technologies. Their influence on traditional housing markets remains understudied. At the same time, the multiplicity of local regulations adopted by big touristic cities in developed countries shows a lack of  consensus both on the consequences and on the role of regulation. However, the evidence on the actual impact of Airbnb’s market entry on housing markets is still scant. We assess the impact of Airbnb’s entry on housing rents and housing prices in the city of Barcelona.

Barcelona is an interesting case study because the difference in profitability between renting long-term to residents and short-term to tourists caused a significant penetration of Airbnb in some areas of the city. Several estimation approaches that exploit the
geography and timing of Airbnb entry indicate that neighborhoods that experienced higher penetrations by Airbnb experienced faster growth in prices and rents.