Published On: Wed, Aug 9th, 2017

Germany: Real Estate Companies Have Taken Over Airbnb Apartments

Real Estate Companies have become the mainstay of the apartment-sharing site, and are scooping millions of euros a year through the use of the platform.

 

Rental of apartments by Airbnb has become a profitable business model for real estate companies, revealed German newspaper The Süddeutsche Zeitung

The paper analyzed an over 37,000 Airbnb assets in 10 major cities in Germany in collaboration with the French Le Monde, the Dutch Trouw and the De Tijd.

The data showed that about 1,290 homeowners offer more than one property to rent through the platform in Germany, which is one of the main reasons behind the rise in rental rates and the emptying of central neighborhoods in the major cities. In the Netherlands, the research foun, about 20% of Airbnb assets in the country are operated by real etate companies, rather than by private individuals.

 

About 58% of the assets advertised on Airbnb Germany are fully rented apartments, with entire buildings leased in the short term. That is, professional homeowners have become the mainstay of website activity. At the same time, the investigation revealed that the possibility of renting beds in apartments constitutes less than 2% of the ads on the site.

 

 

According to the report, some rental companies have increased their income by millions of Euros a year thanks to their use of Airbnb as part of their business model. The research also found that many of these companies write the ad so that the owners of the properties will be seen as private individuals offering their home for rent. In addition to the leasing companies, firms that provide the management of the various Airbnb assets for the platform users have also been established throughout Germany, and are responsible for advertising the ads, transferring the key to the guests and cleaning the apartment after leaving.

In response to a query from the International Broadcasting Authority of Germany Deutsche Welle (DW), the Airbnb denied the allegations. “These figures are wrong and based on faulty methodology and false conclusions,” an official statement said. “Airbnb has always been a platform in which various types of housing options have been offered, including boutique hotels and bed and breakfasts, the vast majority of which are homeowners, individuals who occasionally rent a room, apartment or house while on vacation, in another city. ”

Of the ten cities surveyed, Cologne offers the highest rate of Airbnb assets, at a ratio of 1,154 beds per night per 100,000 residents. In Berlin, however, the largest number of rental apartments – 139,000 beds per night – was recorded, revealing the extent to which the platform controls the tourism sector in the city. Of this figure, 38.5 thousand beds are rented by Airbnb. For comparison, HomeAway, the rival apartment-sharing site owned by the American travel giant Expedia, offers only about 400 rental properties in Berlin.

It is easy to understand the prosperity of apartment sharing locations in the city if you compare the average price per night per person in Airbnb compared to a night at the hotel: about 55 Euros compared to about 80 euros, respectively.

Europe in the housing shortage

In Berlin, as in many other cities in Germany, there was a severe lack of affordable housing. Although the city has a maximum rent limit, it leaps 10% annually. Berlin municipality imposed strict restrictions to combat the phenomenon on the rental of vacation and short-term apartments. Thus, for example, tenants who do not have a suitable license may be fined 100,000 Euros. Also, as early as 2014, the Berlin municipality passed a law prohibiting the use of residential space for vacation apartments unless the owner of the property houses at least 50% of the condo. Besides, it is forbidden to leave vacant residential areas outside the housing market for a period exceeding six months.

Also HomeAway pictured

Germany is not alone in the fight against rising rental prices, and the platform of Airbnb has brought housing distress to other European cities as well.

In the Netherlands, for example, it is forbidden to rent a short-term apartment for more than 60 days a year, and in the UK, the law prohibits rents exceeding 90 days a year. Similarly, in Barcelona last year the municipality fined the sites sharing the Airbnb and HomeAway apartments hundreds of thousands of Euros on the publication of rooms without a license.

Airbnb is believed to hold the largest share, about 15%, of the global private housing market. While HomeAway holds the second largest share of the global market, about 12%, according to US investment firm Susquehanna International

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