It used to be said that if we spend up to one-third of our salary on a flat, it’s good. Now we see that often this one-third of the salary is not enough – says Bartosz Turek, chief analyst at HRE Investments, in an interview with TVN24 Biznes. Today we are dealing with the market of real estate owners and they dictate rental prices. – It’s not like they are bloodsuckers, although there are investors who forget about elementary decency – adds Turek.
“Yes, up to PLN 1,000, I am able to pay the rent plus bills and help run the house (original spelling)”, “I don’t want to wonder anymore whether to pay for the apartment or for groceries. It’s too much for me”, “Rental costs at the moment they absorb the lion’s share of what I earn” – these are just a few statements in social media posted on groups where future tenants are looking for housing offers in barter settlement – for example, in exchange for caring for an elderly person.
On the market, you have to pay an average price for renting a 50-meter apartment in Warsaw PLN 3,750 (annual change in the cost of rent by 33%), in Kraków PLN 3,050 (increase by 36%), in Poznań PLN 2,550 (increase by 21%), in Toruń PLN 2,106 (increase by 32%), and in Sosnowiec PLN 1,918 (increase by 27%). – Counter and administration fees should be added to these amounts – says Anton Bubiel from Rentier.io in an interview with TVN24 Biznes. The rates are breaking records and for an increasing number of people they exceed financial possibilities. – Price drops are to be expected. But that’s not the case, he adds.
Rents up 30 percent. what reasons?
In the opinion of Bartosz Turk, chief analyst at HRE Investments, the problem is that there are not enough flat offers. Even before the explosion war in Ukraine according to his estimates, there was a shortage of about 1.5 million housing units. Currently, developers have reduced investments by one third. – This does not bode well for our housing market – he emphasizes during an interview with TVN24 Biznes and adds that very high rental rates, which have gone up by as much as 30 percent, are a challenge.
What are the reasons for this? – We have high inflation. As the costs of maintaining the property increase, they are automatically passed on to the tenants. Currently, it is more difficult to access loans, and if we cannot buy a dream apartment, then renting is the solution. And that’s how demand is boosting, he explains.
It points to another reason for price increases. Many Ukrainians who fled the war came to Poland, which generates demand on the rental market. According to information from the Border Guard, from February 24, 2022, which is the day of the beginning of the aggression Russiaover 10 million refugees from Poland crossed the Polish-Ukrainian border Ukraine. Some of them stayed in our country, which significantly limited the number of apartments available on the market. – It used to be said that if we spend up to one-third of our salary on a flat, it’s good. Now we see that often this one-third of the salary is not enough. Sooner or later things will get better, but for now we are in a bad situation.
The phenomenon of downsizing
We ask, what are the price limits on the real estate market, taking into account that, according to the Central Statistical Office, the average gross salary in the enterprise sector in January 2023 amounted to PLN 6,883.96, and from January 1, the minimum salary for work is PLN 3,490? – Limits are set by the market. You have to grit your teeth and survive it – replies Bartosz Turek, adding that today the phenomenon of downsizing has gained in importance.
– If someone cannot afford a larger apartment, they exchange it for a smaller one, in a worse location, further from the center, in an older building. Or they share a larger apartment, for example, in two households – he explains.
He points out that for the price for which it was possible to rent a two-room apartment in Warsaw more than a year ago, now you can rent a studio apartment. And for the price of a cheap studio apartment several months ago, you can rent a room today. – If inflation remained at a double-digit level and we were talking in a few years, then the whole salary would not be enough to rent an apartment – he adds.
How is abroad?
Bartosz Turek says that before the outbreak of the war he checked the situation of the inhabitants of Kiev. – The average net salary was not enough to rent a studio apartment. Earning on average, it was even a big expense to share a room in a better location – notes Turek.
He gives an example that a couple with two average wages, after paying for housing and the cost of a modest living, was unable to save anything because they spent more than they earned. On average, they spent 65 percent of their net salary on rent for a one-bedroom apartment outside the city centre. – This means that a single person with an average salary, as a rule, could not afford to rent on his own, and not in the city center, but in cheaper areas of the city.
In an interview with TVN24 Biznes, Dawid Gutkowski, a developer, real estate market expert operating in Spain and Great Britain, draws attention to the situation of residents of smaller towns, where, according to him, construction or shop workers earn between 1.2 and 1.5 thousand euros, where minimum wage in Spain it is €1,167.
– They rent apartments for 450 to 600 euros. However, a very large percentage of people under 30 are unemployed. Two years ago it was 40 percent. Unemployed people receive one thousand euros of social support from the state. It is still a popular solution that young people live with their parents, he points out.
He adds that in the UK, the salary of a bank employee or lower-level policeman is between £2,500 and £3,000. “That’s why renting rooms is very popular here and they’re on average £100 to £140 a week.” in the vicinity of London, in the fifth zone, where the journey to the center takes an hour. Renting an entire small house costs around £2,000 a month. So not everyone can afford to rent it on their own. In any case, quite a large part of the family budget goes to real estate, to live somewhere, he says.
Market reshuffles. “Back then, apartment owners were looking for tenants”
Commenting on the situation on the Polish real estate market, Bartosz Turek draws attention to the perspective of apartment owners. – Now there is a market for them, but during the COVID-19 pandemic, the rental market was completely different. Students terminated their contracts, returned to their family homes, and then the apartment owners looked for tenants. A lot of the premises were empty, he says.
He also emphasizes that homeowners are at great risk. – They put property worth several hundred thousand zlotys at the disposal of a stranger they do not know, who can devastate the property – he points out.
– I heard about a situation where someone rented a newly renovated apartment, and the tenant not only stopped paying the rent, but also devastated the apartment to such an extent that he took everything out of the apartment: furniture, fittings, taps, sockets and even tore off the wall tiles. plasterboard, which is a total abstraction, because it cannot be used again – he lists and calculates that it generated several dozen thousand zlotys of loss.
The analyst added that it is difficult for owners to assert their rights in such situations. – The tenant can avoid liability in many ways, as in the case of so-called squatters, for whom the owner of the apartment may incur costs even for several years, because it is impossible to get rid of such people quickly – he says.
– It’s not that the owners are such bloodsuckers, although there are investors who forget about elementary decency – he assessed.
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