Jan 21, 2025

How Airbnb Regulation Will Affect Rental Prices in Prague

Short-term rental prices on platforms like Airbnb are rising again in Prague, further exacerbating the cityโ€™s already strained housing market.

Both the public and real estate agencies are calling for stricter regulations, similar to those in Amsterdam or Lisbon, in the hope that they will lead to more affordable housing.

What Regulations Could Help?

A key measure could be amending the Act on Tourism Business to grant municipalities more authority to regulate short-term rentals through the e-Turista system, set to take effect in mid-2025.

โ€œI see this as a crucial step, and I believe it will positively impact Pragueโ€™s housing market by increasing the supply of apartments for long-term rentals and, most importantly, reducing rental prices,โ€ says Filip ล ejvl, managing partner of the real estate agency Philip & Frank.

Implementing Airbnb regulations could stabilize rental prices in the Czech Republic, which otherwise are expected to rise further, not just in 2025 but in the following years.

Airbnb has shifted far from its original concept of a shared economy and evolved into a commercial enterprise that significantly impacts residential markets. In Prague, more than 8,000 apartments are listed on the platform, with 80% owned by professional landlords managing multiple properties. This trend underscores the urgent need for change.

โ€œWe estimate that after regulations are implemented, thousands of apartments could return to the long-term rental market. This would give residents more housing options, improve the quality and safety of life in the city, and, above all, help ease the pressure on rental prices. Ideally, long-term rental prices could stabilize or even decrease,โ€ ล ejvl adds.

The Growing Rental Crisis

The lack of available rental properties and soaring prices are increasingly problematic, especially for families with average incomes. For instance, the average rent for a 2+kk apartment in central Prague is now around CZK 25,000 per month, marking a 15% year-on-year increase.

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Lessons from Other Cities

Cities like Vienna, London, Barcelona, Amsterdam, and Lisbon have already introduced stricter Airbnb regulations, setting an example for Prague.

โ€œAmsterdam limited Airbnb rentals to 30 nights per year, reducing the number of listings from 12,000 to 5,000 within five years. This opened up part of the housing market. Similarly, Lisbon banned new short-term rental registrations in certain historic districts, which led to a 9% drop in housing prices in those areas,โ€ explains ล ejvl.

The Impact on Permanent Residents

Short-term rentals also disrupt the lives of permanent residents. In buildings where Airbnb listings are prevalent, residents frequently face issues such as noise, disorder, and reduced security. These challenges often push permanent residents to move away, further straining local communities.

โ€œPotential buyers and tenants actively avoid properties in buildings dominated by Airbnb listings. The situation is particularly dire in Prague 1, where up to 70% of apartments are used for short-term rentals. Living conditions there have become unbearable. Hopefully, the upcoming amendment will bring some relief,โ€ ล ejvl concludes.

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