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real estate. Analysts: Normality is returning to the rental market

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The offer of apartments for rent on the market is being rebuilt, write HRE Investments analysts Oskar Sękowski and Bartosz Turek. This may be facilitated by the outflow of migrants, easier access to loans and the fact that last year the situation on the rental market was so good that some affluent compatriots decided to invest in apartments. Experts emphasize, however, that although rental rates have stopped growing, the correction is only symbolic.

As we read in the HRE Investments analysis, the first half of 2023 “brought a breath of long-awaited normality to the rental market”. “Its most important manifestation is the rebuilding offer of apartments. Since the beginning of the year, about 10,000 units for rent have been added. Thanks to the rebuilding offer, the pressure on rental rates has clearly decreased. in 2022, there was an increase of 20-25% on average. – we read.

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More apartment offers on the market

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“In June 2023, there were over 73.7 thousand unique offers of apartments for rent throughout Poland – according to Unirepo data. This is as much as 75 percent more than in April 2022, which was the worst in this respect. dealing with an unprecedented purchase of the offer of apartments for rent. At that time, we could only find 42,000 unduplicated offers of apartments for rent on advertising portals. In practice, however, there were situations in which in some locations, for example, there were sometimes no offers of two-room apartments “- it was written .

Analysts cite several reasons. “After the start of the war (February 2022), we were dealing with an influx of Ukrainians fleeing their country from armed attack. Then, in an impulse of the heart, some Poles who had free premises for rent decided to lend them to refugees coming to us. So the supply was limited But that’s not all, some of the Ukrainians coming to us could afford rent a flatwhich increased the demand. This one was not low anyway, because at the end of 2021 the taps with mortgage loans began to be turned off. As a result, an increasing number of compatriots lost the opportunity to buy a flat and were forced to use the rental market offer.

“The effect? ​​As we mentioned earlier – in April 2022, the number of unique apartments for rent across the country fell to 42,000. This is about 3% of the entire existing stock. So it is worth being aware that the result at the level of 5% or lower is considered is for the drastic purchase of the offer” – we read.

Four pillars

However, over time, the situation began to improve. According to experts, at least four mechanisms were at work here. “First of all, apartments previously lent to refugees began to return to the rental market. On the other hand, some newcomers decided to move out of Poland, which limited demand. In addition, it has been easier to get a loan for several months now. Thanks to this, some of the existing tenants have regained the opportunity to buy their own. M’, which they eagerly use today.Natural market mechanisms were also conducive to rebuilding the offer.The point is that in 2022, when rented premises were falling apart and rent rates were skyrocketing, some compatriots came to the conclusion that it is worth buying premises for rent. This additional new supply was also conducive to rebuilding the offer.

According to analysts, the June offer is already similar to the pre-war one, which means a greater dose of normality. “On the one hand, tenants have a choice again and are not forced to accept every offer. On the other hand, there is no need to be overly optimistic. We are still far from the situation from 2020, when tenants were in the lead to such an extent that it was the owners of apartments they were looking for tenants, not the other way around.

“However, this does not change the fact that the effect of a larger offer is also a clear change in the trends that have recently been rocking rental rates. In 2022, they increased by 20-25% in the largest markets. For several months, this trend has disappeared. stabilization, although in recent months there has even been a slight, short-term correction, but one should be aware that rents cannot be expected to return to pre-war levels. inflationincrease in wages and higher costs of maintaining real estate mean that the potential for a decrease in rents is limited.

Limited rental demand

According to analysts, the factor that will continue to limit the demand for rent in the coming months will be easier access to loans. “First, the market expects interest rate cuts, and in addition, a government program of cheap loans for people buying their first apartment will start in July. Both of these changes mean easier access to credit. As a result, some tenants who have been forced to postpone their decision to buy an apartment so far can go to the bank and choose the property. This should reduce the demand for rent in the coming months.

Main photo source: Damian Lugowski / Shutterstock.com

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