In the first eight months of 2017, 43% of overnight stays in Reykjavík were in Airbnb apartments and rooms, according to a new report by Landsbankinn.
According to the report, the number of overnight hotel stays has decreased since last year, while the reverse is true for Airbnb stays, which have rocketed up.
More, more, more
Landsbankinn estimates that 1.1 million overnight stays were in Airbnb last year, with 1.4 in the Greater Reykjavík area. Currently 44% of rental properties are listed on Airbnb.
In 2016, the turnover for Airbnb rentals in Reykjavík was 46 million euros, or 6.1 billion ISK. Of this total, an estimated 15%, or 900 million ISK goes to the Airbnb company, but the report states that it is doubtful the company pays any taxes in Iceland. This places Airbnb hosts and the company itself in an unfair competitive position compared to traditional hotels and guesthouses that have to pay taxes on their operations.
Airbnb continues to be a serious headache for Reykjavík as apartments bought for the sole purpose of tourist rental–often by investment companies–adds insult to injury to a housing market already struggling to meet demand. That means higher prices and a trickier time for especially young people to get into the market. In fact, housing prices rose 25% in the last 12 months.
The terror of Airbnb
As we wrote about last month, Airbnb has had a significant impact on downtown Reykjavík and many locals are tired of living in a theme park without neighbours and with services solely catering to the needs of tourists.
The bureaucratic process is also slow and impractical, which means many people don’t apply for permits. But with Reykjavík being the city where you can charge the highest prices for Airbnb in Europe, it is doubtful the market will decrease anytime soon.
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