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Short-term rentals and housing market: Evidence from portuguese metropolitan areas

Author

Listed:
  • Francisco Nobre

    (University of Surrey, School of Economics)

  • Diogo Gonçalves

    (University of Bristol, School of Economics)

  • Ronize Cruz

    (University of Coimbra, Centre for Business and Economics and Faculty of Economics)

Abstract

In this paper, we make use of the rapid expansion of short-term rentals in Portugal, based on a policy change in 2014, to estimate the effects on house prices. Using a novel dataset consisting of property transaction data, from 2010 to 2017, for the metropolitan areas of Lisbon and Porto, we causally identify the impact of these reforms through a two-way fixed effects model, at the quarterly level, where we control for property specific characteristics and location and time fixed effects. The evidence suggests that a one-unit increment in the number of local lodging establishments results in a 0.17% increase in the value of transaction, which is ensured by a set of robustness exercises. Stronger effects are found for properties with four or more bedrooms, owned by citizens outside of the European Union, in the municipality of Porto and at the upper quantiles. We also document a decrease in the number of transactions of new buildings and a positive effect on the value of commercial properties.

Suggested Citation

  • Francisco Nobre & Diogo Gonçalves & Ronize Cruz, 2023. "Short-term rentals and housing market: Evidence from portuguese metropolitan areas," CeBER Working Papers 2023-04, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2023-04
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    References listed on IDEAS

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    1. Garcia-López, Miquel-Àngel & Jofre-Monseny, Jordi & Martínez-Mazza, Rodrigo & Segú, Mariona, 2020. "Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona," Journal of Urban Economics, Elsevier, vol. 119(C).
    2. Tomaso Duso & Claus Michelsen & Maximilian Schäfer & Kevin Ducbao Tran, 2021. "Airbnb and Rental Markets: Evidence from Berlin," Bristol Economics Discussion Papers 21/746, School of Economics, University of Bristol, UK.
    3. Alberto Hidalgo & Massimo Riccaboni & Francisco J. Velázquez, 2022. "The Effect of Short-Term Rentals on Local Consumption Amenities: Evidence from Madrid," Working Papers 01/2022, IMT School for Advanced Studies Lucca, revised Jan 2022.
    4. Maxence Valentin, 2021. "Regulating short‐term rental housing: Evidence from New Orleans," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(1), pages 152-186, March.
    5. Cl'ement de Chaisemartin & Ziteng Lei, 2021. "More Robust Estimators for Instrumental-Variable Panel Designs, With An Application to the Effect of Imports from China on US Employment," Papers 2103.06437, arXiv.org, revised Sep 2023.
    6. Evangelista, Rui & Ramalho, Esmeralda A. & Andrade e Silva, João, 2020. "On the use of hedonic regression models to measure the effect of energy efficiency on residential property transaction prices: Evidence for Portugal and selected data issues," Energy Economics, Elsevier, vol. 86(C).
    7. Luís Mendes, 2022. "The Dysfunctional Rental Market in Portugal: A Policy Review," Land, MDPI, vol. 11(4), pages 1-17, April.
    8. Koster, Hans R.A. & van Ommeren, Jos & Volkhausen, Nicolas, 2021. "Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles," Journal of Urban Economics, Elsevier, vol. 124(C).
    9. Franco, Sofia F. & Santos, Carlos Daniel, 2021. "The impact of Airbnb on residential property values and rents: Evidence from Portugal," Regional Science and Urban Economics, Elsevier, vol. 88(C).
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    Cited by:

    1. Pereira dos Santos, João & Strohmaier, Kristina, 2024. "All That Glitters? Golden Visas and Real Estate," IZA Discussion Papers 16857, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Policy Analysis; Housing Market; Portugal; Short-Term Accommodation.;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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