Yanolja Collaborates with Purdue University
Serious Impact on Multi-Unit Housing
Global Regulatory Moves in Italy, US, and More
Global accommodation sharing platform Airbnb has been found to play a significant role in the rise of real estate prices and rents in certain areas of Seoul, with particularly strong effects in regions at high risk of speculation.
On the 29th, Yanolja Research and the CHIBA Research Center for Hospitality and Retail Industries Business Analytics at Purdue University in the United States released a report titled "The Growth of Airbnb and Its Impact on the Seoul Real Estate Market." The research team analyzed the correlation between changes in the number of Airbnb accommodations in Seoul from 2010 to 2022 and changes in real estate prices and rents by legal dong (administrative neighborhood).
According to the report, Airbnb accommodations in Seoul are concentrated in specific areas among the 467 legal dongs, with Seogyo-dong in Mapo-gu, known for the Hongdae commercial district, having the highest number at 628 listings. The report stated, "Considering that these accommodations were previously used as residences, this implies a reduction in the number of properties available for living," and added, "The increase in the number of Airbnb accommodations may influence the real estate market in certain areas."
Specifically, in terms of actual real estate transaction prices, Airbnb's impact was significant on apartment and officetel transaction prices in areas like Gangnam-gu, where these types of properties are densely located. Additionally, the influence on transaction prices of multi-family housing was particularly notable in the Mapo-gu area, where Airbnb density is relatively high.
Regarding monthly real estate rents, Airbnb's impact on apartment rents was significant in legal dongs within Mapo-gu, while its influence on officetel rents was prominent in the three Gangnam districts (Gangnam, Seocho, Songpa).
A particularly noteworthy result was that in the Mapo-gu area, where both Airbnb density and multi-family housing density are high, Airbnb's impact on multi-family housing rents was especially pronounced. This suggests that Airbnb's expansion in concentrated areas may have a more severe effect on multi-family housing real estate.
Furthermore, a comparative analysis of Airbnb's impact on autonomous districts designated as speculative areas under the previous government's real estate measures showed that for apartments, there were significant differences in both real estate prices and rents depending on whether the area was designated as speculative. For officetels, there were significant differences in real estate prices but not in rents, while for multi-family housing, there were no differences in real estate prices but significant differences in rents.
"Expansion of Shared Accommodation Industry Acts as a Catalyst for Rising Real Estate Transaction Prices"
Additionally, a comparative analysis between five Seoul autonomous districts with over 1,000 registered Airbnb accommodations (Mapo-gu, Gangnam-gu, Yongsan-gu, Jung-gu, Jongno-gu) and non-concentrated districts revealed that for apartments, significant differences were found only in real estate prices. For officetels, no significant differences were found in either real estate prices or rents. In contrast, for multi-family housing, no differences were found in real estate prices, but significant differences were observed in rents.
The research team pointed out that the expansion of the shared accommodation industry could act as a catalyst for increases in real estate transaction prices and rents, warning that such effects may be more pronounced in areas with high housing costs like Seoul.
Professor Jang Su-cheong of Purdue University stated, "The government must closely analyze the impact of shared accommodation businesses like Airbnb on the real estate market and plan policies based on this analysis," adding, "This is directly related to the public's housing issues and quality of life, and ultimately plays an important role in reducing social costs."
He continued, "If Airbnb is guided to establish itself as a sustainable business model within the accommodation industry ecosystem, it will be possible to reasonably regulate both the positive and negative impacts on local communities."
Growing Global Movements to Regulate Airbnb
Meanwhile, since the COVID-19 endemic, calls to regulate the shared accommodation industry have been growing worldwide. As homeowners rush into the accommodation sharing business, the number of rental homes available to residents has decreased, and housing prices have risen, causing problems.
On the 9th, Italy seized Airbnb assets, citing Airbnb as a major cause of rising housing prices. Prosecutors stated that Airbnb failed to collect taxes on approximately 3.7 billion euros (about 5.1914 trillion KRW) of short-term rental income earned by homeowners from 2017 to 2021.
According to Italian law, homeowners must pay 21% tax on short-term rental income. Last year, Airbnb challenged this Italian law, which requires withholding part of the rental income from homeowners and paying it to tax authorities, arguing that it conflicts with the European Union's (EU) taxation principles.
However, the European Court of Justice, the EU's highest court, ruled that Airbnb must comply with Italy's requirements. Airbnb responded by saying, "We were surprised and disappointed by the actions announced by the Italian prosecutors."
Beyond Italy, movements to regulate Airbnb continue worldwide. Since September, New York City has required residents who want to rent out their primary residence for less than 30 days to report to and obtain permission from city authorities. Additionally, homeowners must stay with guests, and the number of guests is limited to two.
Barcelona in Spain, Florence in Italy, Copenhagen in Denmark, and Penang in Malaysia have also imposed restrictions on offering private homes as Airbnb accommodations.
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