Prior to the COVID-19 pandemic, there was a significant increase in Airbnb and similar rental platforms in tourist hotspots, including the Brussels-Capital Region (BCR). The number of listings on Airbnb and comparable tourist rental platforms like Nestpick, HomeAway, and RentbyOwner surged. These platforms faced criticism for potentially negative impacts on local residents. Offering short-term rental opportunities, they were seen as part of the sharing economy, which, while economically beneficial in terms of employment and income, also faced backlash for potential gentrifying effects. The phenomenon of 'touristification' caused by these platforms was believed to lead to higher housing prices in the BCR.
Professor Pieter-Paul Verhaeghe led a study using unique data to examine the long-term impact of Airbnb offerings on average rent and sale prices in various neighborhoods. The study considered characteristics of the housing as well as time-invariant and economic characteristics of the neighborhoods.
Between 2015 and 2017, Airbnb listings in the BCR doubled to over 12,000, stabilizing at this level until 2019. The pandemic and subsequent travel restrictions dealt a severe blow to tourism in the capital and, consequently, to Airbnb, reducing listings to about 9,000 units. This decline, from which Airbnb is still recovering, revealed different trends, including a marked professionalization of the Airbnb market in Brussels, with more professionals and investors renting multiple properties simultaneously. This shift strayed from Airbnb's original sharing philosophy and was further accentuated by the pandemic, with professional players gaining market share as offerings from smaller, occasional hosts dropped significantly.
Verhaeghe and his team specifically investigated how the sharp increase and subsequent decline of Airbnb affected the rental and sale prices of properties in the BCR. They distinguished between professional and non-professional hosts on the platform and examined two periods: the effect of Airbnb on rental prices between 2016 and 2018, and then from 2018 to 2020 during the COVID-19 pandemic.
The study found that from 2015 to 2017, the Airbnb density per neighborhood, defined as the number of Airbnb listings per 100 households, increased and then stabilized around 2.3 listings before dropping to 2.14 in 2020 due to the pandemic. Average monthly rent per bedroom rose from €365 in 2016 to €460 in 2018, then fell to €428 in 2020, primarily due to decreases in Brussels city. The average sale price of houses consistently increased between 2015 and 2021 to nearly €300,000.
Verhaeghe concluded that the increase in Airbnb density between 2016 and 2018 was indeed associated with a significant increase in average rental prices, regardless of whether the Airbnb property was offered by professional hosts. This price-inflating effect on the regular rental market aligns with previous international research. However, no effect of Airbnb on average neighborhood sale prices was observed.
Verhaeghe's study was funded by an Innoviris – Prospective Research grant as part of the 'Air-BRU: Inequalities of Shared Short-Term Rentals in Brussels' project.