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