Modeling the Spatial Impact of Short-Term Rentals on House Prices: The Case of Athens, Greece

The purpose of this study is to explore the spatial impact of short-term rental activity on house prices in the city of Athens, Greece. It is well established that the increasing number of short-term rentals has a number of consequences on the functions and living standards in several cities around the world. An aspect that is not studied very often is the effect of short-term rentals on house prices and, especially, the spatial distribution of this effect. In this paper, spatial regression models are presented, incorporating several of the commonly employed house characteristics, such as structural and locational characteristics, with the addition of the short-term rentals as an explanatory factor. Geographically Weighted Regression (GWR) models, in particular, produce the geographic distribution of regression coefficients, allowing for the study of the short-term rentals’ influence on house prices at the local level. Furthermore, spatial regression models are compared to global linear models. Although global models indicate that short-term rentals have an overall positive contribution on house prices, Geographically Weighted Regression, through the local regression coefficients, reveals spatial patterns with mixed effects, both positive and negative. The greater positive impact is observed in the area around the historical center of the city where short-term rentals’ presence is intense.