Influence of Short-Term Renting on the Prices of Residential Properties in the City of Sofia

Abstract

This paper is dedicated to investigating the relationship between the supply of short-term tourism accommodation and housing prices. The condition and dynamics of the price level as a result quantity and of the quantity factor have been studied. Information from current electronic sources for real estate trading and travel bookings was used, as well as data from Eurostat. From the international comparison made, it can be concluded that short-term rental housing is flourishing in a number of well-known European tourist destinations. In some countries, legal restrictions have been taken, but this approach is not widespread and is not applied in Bulgaria. Housing prices for sale and for long-term rental in Bulgaria are growing steadily. The city of Sofia, where the housing market is the most developed, was chosen as the object of research. The relationship between the number of offers for short-term accommodation and the sale and rental prices in several particularly preferred neighborhoods of the capital was investigated. A moderate to strong positive correlation was found between the number of housing units by neighborhood offered for short-term tourist stays and residential real estate prices and rental levels for long-term rentals. Measures are proposed to control these processes without jeopardizing the sustainable development of tourism.