Rising rental prices in Brussels due to Airbnb
The evolution of the Airbnb market
Brussels has seen a rapid increase in the number of homes rented out via Airbnb over the past few decades. Between 2015 and 2017, the Airbnb supply doubled to over 12,000 properties, before stabilising at this level until 2019. The pandemic hit the Brussels tourism sector hard, also resulting in a drop in Airbnb supply to around 9,000 properties.
As in other European cities, the Brussels Airbnb market is experiencing a high degree of professionalisation, with players investing in the purchase of property and then renting it out on Airbnb.
This trend has been reinforced by the pandemic, with professional hosts gaining even more market share and the supply from a large number of smaller players rapidly diminishing.
Study objectives
The study examined the extent to which the sharp rise, then fall, in Airbnb supply in Brussels has affected rental and purchase prices for accommodation in the Region. Specifically, it analyses the period from 2016 to 2018, as well as the pandemic years between 2018 and 2020. The researchers further distinguish between professional and non-professional players on the Airbnb market.
The results
The results show that between 2016 and 2018, a concentration of Airbnb properties in a district, whether professionally managed or not, generates an increase in average rents. The study also points out that it is astonishing that this effect could be observed in such a short space of time.
According to the researchers, it is difficult to determine the extent of the increase because information on rents is highly fragmented and not centrally available. The study concludes that per additional Airbnb property per 100 households, the increase in average residual rents amounts to 1.6%.
Several factors influence this price. The increase in supply on Airbnb de facto means a decrease in supply on the rental market, putting pressure on prices. Districts with lots of Airbnb attract more tourists, which drives up the value of all property, including shops and Horeca.
For the period from 2016 to 2018, there was no discernible impact of Airbnb on the average purchase price of homes in a district. There was also no impact between the pandemic years 2018 and 2020. Although Airbnb supply has fallen in most Brussels districts, this has not been accompanied by a drop in rental prices in the first year of the pandemic.
To find out more, read the working paper "Is Airbnb driving up rents in the Brussels-Capital Region?" by Pieter-Paul Verhaeghe, Marek Endrich and Petrus te Braak.