In this study, we analyzed the impact of COVID-19 on house rents and prices in Warsaw, the capital of Poland. Hedonic indexes indicated a slight increase in prices (ca. 1.2%) and a substantial drop in long-term rents (ca. -7.7%) between March 2020 and December 2020. The largest decline in rents occurred in centrally located neighborhoods, influenced mainly by the inflow of new housing supply from the short-term rental market (the Airbnb Warsaw market shrunk by almost 30% in December 2020 y/y). Using hedonic methods, we highlighted the influence of the shrinking Airbnb market on the drop in long-term rents. The study indicates the elasticity of rents with respect to Airbnb supply, with a 1% change in Airbnb listings leading to a 0.031% change in rents.