An increase in short-term let activity is not the primary cause of rental shortages in Ireland, according to research by ESRI.
It is believed short-term rental properties in rural tourism hotspots would be rented out long term were it not for advertising platforms such as Airbnb.
The doubts come as the Government is pushing ahead with a long-promised clampdown on short-term lets advertised on websites such as Airbnb and Booking.com, with plans to effectively ban them in areas with a population of over 10,000.
The Government believes as many as 12,000 Airbnbs will be rented out in the long-term sector once the new rules are in place.
All short-term lets will also have to be registered with a new Fáilte Ireland register, so councils can keep better track of properties that have the necessary planning permission to operate as short-term lets.
In a new report, ESRI said that at local authority level there is “no correlation” between increases in Airbnb activity and reductions in new tenancies.
But it said this does not mean Airbnbs have not had a “detrimental impact” on the long-term rental market in some areas.
“Short-term letting activity may exacerbate the situation in specific local areas, but it does not appear to be the root cause of the observed falls in available [private rental sector] accommodation nationwide,” the research paper said.
The report found short-term letting is heavily concentrated in tourism hotspots, including the west coast, but also central Dublin
It said this may be because there is a “strong correlation” between current listings and holiday homes in rural spots.
“This suggests many of these properties would not be expected to be found in the private rental sector even in the absence of Airbnb. Any restriction on activity may therefore not have the desired effect of greatly increasing supply in these areas.”
Restrictions on short-term lets may not have a “significant impact” on making rents in the long-term rental market any cheaper, according to the report.
This is because the restrictions would not “address the fundamental issue of lack of supply”.
The report also highlights how lucrative short-term lets are. Property owners on average would only need to rent out their homes on Airbnb for six to eight days a month in coastal areas, or eight to 10 days a month in Dublin city, to obtain the same revenue as they would if they put them on the private rental sector.
The impact of Airbnbs and other short-term lets on the rental sector has been exaggerated and policy needs to be based on “more accurate data”, according to ESRI.
The report found short-term letting is heavily concentrated in tourism hotspots, including the west coast, but also central Dublin.
ESRI said it found no evidence linking increases in short-term let activity to falls in new registrations for rental tenancies between 2019 to 2023.
Regulators and policymakers need to have a better understanding so they can monitor activities in the rental sector
Dr Rachel Slaymaker, of ESRI, who wrote the report, said the register would help provide insight needed for a more balanced approach.
“We need better data. The proposed short-term let register that was announced last week will be crucial for ensuring a balanced approach to regulation that considers both the need for tourist accommodation and rental housing for locals,” she said.
“At the moment, we’re just using data scraped from random websites, but regulators and policymakers need to have a better understanding so they can monitor activities in the rental sector.”
The report found at least one Airbnb for every 10 private rental sector properties in 38 out of 166 local electoral areas. Two-thirds of Airbnb listings were for entire properties concentrated in tourist hotspots in the west coast, inner-city Dublin and Galway.
Dr Slaymaker said it will be important to take local markets into account and to tailor policies around short-term letting accordingly.
“There are very sizeable numbers of short-term lets in particular areas, especially in central Dublin, Galway and along the west coast where we’ve seen a big fall in the number of new tenancy commencements and availability in the private renting sector,” she said.
“It is misattributed to the short term. We’ve seen that the areas that have seen the biggest increases in short-term let activity are actually those generally in the coastal areas – there’s a high relationship there between current short-term listing and previous holiday homes.
“So the policy responses need to be quite different for somewhere like the centre of Dublin, where short-term lets could have been private rental properties at a different time, and in the tourist areas where those properties might have never been in the private rental sector before.”
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