Home-sharing platforms, particularly Airbnb, have enjoyed tremendous growth over the last decade, as property owners have capitalized on the opportunity to offer rooms, apartments and entire homes to travelers seeking short-term rentals.
The proliferation of Airbnb properties has sparked criticism that Airbnb hosts are snatching up homes that would otherwise be listed in the residential rental or housing market, thus reducing supply and driving up prices.
Setting aside the company’s extreme growth, from 2007 to this date, Airbnb has gone through major transformations. It has strayed significantly from the whole spirit of “sharing”, since the vast majority of Airbnb owners rent out entire properties where they don’t reside themselves – a development that isn’t reflected in public discourse on such matters or the relevant legislation. Today, Airbnb is clearly a touristic enterprise that is being developed within the modern model of “platform capitalism” (and not within a “sharing economy” framework) that digitally connects suppliers with users and fully commercialises a series of resources and goods, among others, residential properties.
In Greece, just like in the rest of the world, the Airbnb property leasing practice spread impressively quickly, starting with just 132 properties that were available through Airbnb’s platform in 2010, to more than 125,000 properties right before the pandemic outbreak.
Source: Balabanidis D., Papatzani E., Pepas D. (2021) Airbnb in the city. Opportunity or threat? Athens: Polis, ISBN: 978-960-435-692-8.
How does Airbnb raise renting costs in a city?
In addition to the essential traits of the Airbnb phenomenon that were described above, that are more or less the same in Athens as in other cities worldwide, another concern are its various side-effects. The most widely recognised Airbnb effect would be the increasing pressure it causes to the properties’ rents in particular and the real estate market in general.
Due to the popularity of short-term leasing, a significant portion of the available housing stock gets off the (conventional) market of long-term leasing, as properties (flats or even entire buildings) that were used as permanent residencies now are part of the Airbnb market available for tourists and other short-term visitors. This means that the long-term lease property supply is shrinking, while demand remains at best the same or is even bigger than before, and, as a result, the ability to cover the housing needs of the largest part of the permanent population (at an affordable cost) is decreasing rapidly.
From an investment perspective, the AirBnB effect can prove to be a good opportunity. Briefly, what this means is that you invest in buying a real estate property and then turn it into an AirBnB money maker.
AV Properties’ real estate life coach can help you make the wise choice of selecting such a property.