A new report from the Economic and Social Research Institute (ESRI) has concluded that there is no direct evidence connecting the increasing number of properties listed on Airbnb with a decrease in new tenancies within the wider rental market.
The study, which was funded by the Department of Housing, acknowledges that while the rise in short-term lettings may have affected the rental market in some areas, it does not appear to be the primary cause of the decline in available rental properties. The research found a strong correlation between Airbnb listings and holiday homes, particularly in rural areas, but noted a weaker correlation in urban centers.
The report states that the assumption that many Airbnb properties in non-urban areas would transition to the private rental sector if Airbnb did not exist is unfounded. Short-term letting activity is highly concentrated in tourist destinations, including the west coast of Ireland, as well as in cities like Dublin and Galway.
In the 38 out of 166 local electoral areas where Airbnb listings represent 10% of the rental market, the highest concentrations are in coastal tourist towns and smaller rental sectors. For example, Airbnb represents one in three lettings in Westport, Co. Mayo, and one in six in Killarney, Co. Kerry. In Dublin’s southeast inner city, it accounts for one in ten, while in Galway’s city center, it makes up one in 14.
The report also examined government measures aimed at curbing Airbnb’s impact on the housing market. Despite attempts to restrict its use, such as encouraging hosts to apply for voluntary registration or change of use planning permission, the report suggests that these efforts have been largely ineffective. Only 91 applications were made in 2023, compared to the 9,142 Airbnb listings in rent pressure zones.
While international evidence indicates that enforcing regulations may not result in a significant shift of properties from the short-term letting market to the long-term rental market, the report acknowledges that some localized effects may occur.
Dr. Rachel Slaymaker, a research officer at ESRI, explained that the majority of Airbnb properties in tourist areas are likely to be holiday homes, which were never intended for the rental market. She emphasized that Airbnb is an attractive option for landlords because they can earn similar revenue by renting out properties for just 6-10 days a month as opposed to long-term renting.
Dr. Slaymaker further clarified that while the ESRI found no evidence linking the rise in short-term lets with the decline in new tenancies, the situation varies by location. In urban centers like Dublin, there may be a higher overlap between the private rental sector and short-term lets, meaning that policies targeting Airbnb in such areas could have a more noticeable impact. However, in tourist towns where many Airbnb properties were originally holiday homes or vacant, these properties are unlikely to return to the private rental sector.
The findings suggest that policymakers must carefully consider local contexts when implementing measures to address the impact of short-term lets on the rental market.
