Airbnb’s Growth Changes Residential Property Prices in Adelaide

Abstract

In this research, the impact of Airbnb on residential property prices in Adelaide is assessed. Many previous European and American research have connected short-term rental, Airbnb and property market and made conclusion that short-term rentals (STR) are increasing housing prices and rents. However, there is no research about Airbnb and its effects on residential property prices in Adelaide. This research aims to fit this gap and makes Plan SA know more about Airbnb’s effects. This research used multiple linear regression model to examine the Airbnb activity’s effects on housing prices in Greater Adelaide during a specific time period before COVID-19. This regression model has been utilised in 3 Airbnb hotspot suburbs, Adelaide, North Adelaide and Glenelg and 3 adjected suburbs with few Airbnb listings, Thebarton, Prospect and Glengowrie in Greater Adelaide; different results in these 3 pairs suburbs has been employed to understand Airbnb’s different effects in housing prices. According to the results of regression model in different suburbs, Airbnb hotspot areas, have higher R squares and unpopular areas have smaller R squares. Considering coefficients in Airbnb hotspot areas, the number of Airbnb listings can increase housing prices and Airbnb daily can decrease housing prices. However, in unpopular Airbnb areas, R square and sample size are too small to make correlation between Airbnb and housing prices. The further study should enlarge the size of sample to verify whether there is a correlation between Airbnb and residential property prices in Airbnb unpopular areas.