The rise in short-term lettings through Airbnb and other platforms is not the primary cause of Ireland’s rental crisis, a new report has concluded.
The study by the Economic and Social Research Institute (ESRI), published on Friday, found there was no correlation between increases in Airbnb activity and falls in new tenancies between 2019 and 2023.
“This does not mean that Airbnb activity has not had a detrimental impact on the private rental sector (PRS) in specific local markets, but it does not appear to be the root cause of the observed falls in available PRS accommodation nationwide,” the report said.
Instead the report’s authors linked the shortage of rental accommodation to a lack of turnover in the market with many tenants opting to remain in situ because of high rents on the open market or because they cannot afford to buy.
The limited supply of new rental properties was also cited as a factor.
According to property website Daft, there were fewer than 2,300 homes available to rent across the State as of February 1st, well below the 2015-2019 average of almost 4,400.
The ESRI report found that two-thirds of Airbnb listings were for entire properties, as opposed to single rooms, and that they were concentrated mainly in tourist hotspots along the west coast as well as inner-city Dublin and Galway.
Overall, Airbnb listings accounted for one-in-10 private rented properties in the State. Westport, Co Mayo, Killarney, Co Kerry and Dublin’s southeast inner city had the highest concentration ratios with one-in-three, one-in-six and one-in-10 respectively.
The report noted there was a very strong correlation between current Airbnb listings and previously recorded holiday homes in non-urban areas.
The research also examined attempts to clamp down on Airbnb and similar platforms in other countries. It concluded that while they resulted in a fall in short-term listings “and some switching back into the longer-term PRS ... the evidence of impacts on PRS prices is more mixed”.
That was because the Airbnb numbers were small relative to the excess demand for rental accommodation, the report said.
“Airbnb activity is more than just an urban phenomenon in Ireland, with a high intensity in many coastal areas, predominantly along the west coast (particularly relevant to the size of the PRS or housing stock more generally),” the report said.
“Balancing the need for tourist accommodation and the income these platforms provide locals in areas where the local economy is highly reliant on tourism against the need for rental housing for locals is a challenge for policymakers,” it said.
The Government has promised to introduce a register of short-term letting properties by summer 2026 which would force landlords to obtain change-of-use planning permission to let out entire houses and apartments on platforms such as Airbnb when they are located in rent pressure zones.
The Government believes the register could take 12,000 properties out of the tourism market, placing them back into the long-term rental market.
“Understanding the dynamics of the short-term let sector and its interaction with the rental sector is crucial for informed policymaking,” one of the ESRI report’s authors, Rachel Slaymaker, said.
“Our findings highlight the importance of establishing a register covering all short-term let activity across Ireland to provide timely data to be used in conjunction with rental sector data to monitor activity, changes in usage patterns and particular pressures in local areas,” she said.
“This is crucial for ensuring a balanced approach to regulation that considers both the need for tourist accommodation and rental housing for locals.”
