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The Global Online Home Rental Services Market size is estimated to grow at a CAGR of 12.9% between 2022 and 2027. The size of the market is forecast to increase by USD 21,190.52 million. The growth of the market depends on several factors, including high real estate prices that make homeownership unaffordable, growth in demand for rented homes, and reduction in housing space due to an increase in urban population density. The population growth in metropolitan cities, driven by economic activities like manufacturing, trade, and employment, has led to an increase in migration across countries worldwide. Consequently, the demand for rented homes has risen due to the influx of migrants into these cities. In 2022, the demand for rental apartments in and around US cities grew by 11% compared to the previous year. According to a survey conducted by Freddie Mac, a mortgage company, consumers now prefer renting to buying a house.
This online home rental services market research report extensively covers market segmentation by type (flats, semi-detached houses, and detached houses), rental category (monthly, weekly, daily, and yearly), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The reduction in housing space due to an increase in urban population density is notably driving the market growth, although factors such as competition due to a fragmented market and low penetration in emerging markets may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Online Home Rental Services Market Driver
The real estate industry in countries such as the US, France, the UK, Germany, Sweden, Spain, Australia, China, and India has experienced a significant upswing in prices following the economic crisis. Across the globe, the cost of houses has risen substantially, with the US recording an annual growth of 13% in July 2021 compared to the previous year. However, the industry is still struggling to meet the soaring demand for housing. In cities like San Francisco, Oakland, Los Angeles, New York, and Seattle, the price-to-rent ratio exceeds 35, making it difficult for prospective buyers to purchase homes. This has resulted in a surge in the rental market during the forecast period. The shortage of housing supply compared to the growing population is driving up property prices. For example, in the UK, the average house price in 2021 rose by 1.9% from the previous year with a corresponding 8.2% increase in average rent, as per Rightmove data. Consequently, the demand for rental properties has exceeded supply, with a 33% drop in available rental properties in the country.
Key Online Home Rental Services Market Trends
Growth in demand for tiny home structures is the primary trend in the online home rental services market. As housing prices and rental rates in densely populated metropolitan cities such as New York, Beijing, Shanghai, Hong Kong, and Tokyo are surging, the demand for alternative home designs such as capsule apartments, box apartments, and 20-square-foot coffin apartments is on the rise. The growing demand for such small home structures will drive the demand for the market during the forecast period.
The acceptability of the concept of the vacation rental marketplace will further strengthen the growth of the market during the forecast period. For instance, vendors such as Airbnb, HomeAway, and Vacations Rentals by Owner (VRBO) offer a platform for the house owner to rent his/her home for a definite period of time when they are out of town. Such innovative ideas and business models will drive the growth of the online home rental services market industry during the forecast period.
Key Online Home Rental Services Market Challenge
Competition due to fragmented markets and low penetration in emerging markets is the major challenge impeding the market growth. The customers of the market generally prefer to stay within city limits. Hence, vendors must compete with the nearby housing properties owned by different operators and individuals. The products offered are less differentiated, and marketing channels used by different competitors, such as Internet advertising, banners, and signage, are also similar. As a result, the level of competition in the market is significant, affecting the occupancy level, rental income, rental rates, and operating expenses.
The market has less penetration in emerging economies such as China, South Africa, India, and Brazil because of the low adoption of such platforms in these countries. For instance, the rent from apartments generated in emerging economies is just one-third of the rent generated in developed markets such as the US and Japan. Thus, the low returns from the emerging market are restricting the growth of the market during the forecast period.
Key Online Home Rental Services Market Customer Landscape
The online home rental services market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Online Home Rental Services Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
9flats PTE Ltd. - The company offers online home rental services in top cities like Berlin, London, Dubai, and Paris as its key offerings. This segment focuses on providing a platform for renting a spare room, apartment, or house from a local or renting out place.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth of the flats segment will be significant during the forecast period. A flat or an apartment is a self-contained type of residential unit that occupies only a small part of a building, generally on a single-story or floor. The rise in demand for flats from the growing millennial population and the growth of the urban population across the world will drive the demand for housing structures. The growth in the urban population has led to a high density of the population in cities, which leads to less area for home construction. This trend is driving the demand for flats globally.
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The flats segment was valued at USD 8,869.86 million in 2017 and continues to grow until 2021. The growing popularity of different types of flats, such as studio apartments, alcove flats, service flats, and convertible flats, will facilitate the growth of privately rented houses. For instance, the demand for studio apartments by single individuals or small families backed by the high percentage of the population in the 25-34 years age group that prefers private sector services will drive the online home rental services market. Such shifts in demographics and changes in customer preference are expected to drive the growth of the flats segment of the market during the forecast period.
A detached house, also known as a stand-alone house, refers to a residential building that is free-standing and not connected to any other structure or building. The demand for detached houses is primarily driven by the growth in their average prices, which has resulted in homebuyers opting to rent detached houses instead. For example, in March 2020, the average sales price of detached houses in the UK increased by 2.1% compared to the previous year. The rise in prices across different regions is contributing to the growth of the detached houses segment. In addition, the increasing millennial population and the rise in single-family rentals are driving the demand for detached houses, as they are preferred by single families. Furthermore, the increasing construction of these houses is also driving the demand for rented detached houses.
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North America is estimated to contribute 38% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The online home rental services market in North America is primarily driven by countries such as the US and Canada. The US is one of the largest consumers and producers of the services offered by online home rental services vendors in the region. In 2021, the US accounted for a majority of the regional market share. The market is expected to grow during the forecast period due to accelerating economic activities such as manufacturing and trade and an increase in migration from the different states in the US to metropolitan cities. The market is also driven by the adoption of mobile homes and the prevalence of the concept of trailer parks in the region. North America was a contributor to the global mobile homes market in 2021.
The outbreak of COVID-19 affected the growth of the regional market in 2020. However, owing to the availability of COVID-19 vaccines and vaccination programs carried out by governments in several countries, such as the US and Canada, business and tourism operations resumed in 2021 with the relaxation of stringent lockdown restrictions. Online home rental services prices in the US increased by around 10% from May to November 2021, which increased the demand for online home rental services. In addition, travelers prefer vacation online home rental services due to the comfort, low cost, increased privacy, and kid and pet-friendly aspects of the lodging. Thus, all these factors will lead to the growth of the regional market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Online Home Rental Services Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.9% |
Market growth 2023-2027 |
USD 21,190.52 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
11.7 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 38% |
Key countries |
US, Canada, China, Japan, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
9flats.com PTE Ltd., Airbnb Inc., Avail, Booking Holdings Inc., BoutiqueHomes, CoStar Group, Elite Destination Homes, Expedia Group Inc., HomeToGo GmbH, Lodgis, LVH Global Inc, MakeMyTrip Ltd., NestAway Technologies Pvt Ltd., Oravel Stays Ltd., Rentberry, Inc., Rentalo.com, Inc, Upad Ltd., Wyndham Destinations, Zillow Group, and Zumper Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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