The Impact of Short-Term Rentals on the Swedish Housing Market : A Study of Airbnb

The purpose of this paper is to analyze the relationship between the expansion of Airbnb and housing prices in major Swedish cities between 2012 and 2023. To investigate this, we estimate several panel data regressions, including a full model with control variables such as interest rates, inflation, median income and population growth. We also estimate a log-linear model to account for large price differences between cities and to allow for percentage-based interpretation of coefficients. Data for the control variables were collected from Statistiska Centralbyrån and Svensk Mäklarstatistik and to measure the growth of Airbnb in Sweden we created an index using Google Trends data as a proxy variable. The study found that the expansion of Airbnb has a statistically significant and positive relationship between Airbnb expansion and Swedish housing prices. The results from the full model show that a one unit increase in Airbnb-index is associated with an increase of 26 SEK per square meter. The log-linear model is consistent with these results, showing that Airbnb activity is associated with an approximate 0.058% increase in square meter prices per index unit. These results indicate that short term renting may contribute to rising housing prices in urban areas. Future research could aim to gather actual Airbnb data and include other short-term rental platforms to provide a more comprehensive understanding of the market impact.