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Tenants are catching their breath. Owners have fewer reasons to be happy

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We paid less for renting an apartment in May in nine of the seventeen cities surveyed in Poland – according to a report by Expander and Rentier.io. – However, the situation of tenants is improving, because rental costs are on average 2.7 percent higher than a year ago, and the average salary has increased by 11.4 percent during this time. – comments Jarosław Sadowski from Expander. From the perspective of owners of rental apartments, this is not good news, as the profitability of such investments has decreased.

In May, rental price drops dominated, compared to April rates – according to an analysis of new ads by experts from Expander and Rentier.io. The largest reductions occurred in Częstochowa (by 4.1%). In second place was Białystok (2.2%), and in third Sosnowiec (2.1%). In turn, rent increases were recorded in Bydgoszcz (4.6%), Toruń (4.1%) and Gdańsk (3.7%).

Rental prices in May 2024

Comparing rental prices in May to those in January, rental rates fell in 11 out of 17 cities. They rose in 5. In Częstochowa, rental prices fell by 8.5 percent since January, and in Radom by 6.5 percent.

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“Of the five largest cities in Poland, which are also the most popular, i.e. Warsaw, Krakow, Gdansk, Poznan, and Wroclaw, noticeable price reductions have only appeared in the latter. In Wroclaw, rental prices have fallen by 2.4% since January. In Gdansk, they have increased by 2.9% during this time. In the remaining three, there have been minor deviations. In Warsaw, there has been a 0.5% drop. In Poznan, prices have fallen by 0.3% since January. In Krakow, you had to pay 0.3% more,” the authors of the report explain.

Rental rates in MayExpander and Rentier.io

Investment profitability

“Decreases in rental rates combined with constantly increasing offer prices for the purchase of apartments result in a decline in the profitability of new investments in apartments for rent. Net profitability, i.e. after taking into account all costs, is on average 4.66 percent. A year ago, when the prices of apartments for purchase were much lower, this profitability was on average 5.35 percent. – analysts emphasize.

To better understand the situation, the authors of the report compared the profitability to a drop in the bank deposit interest rate from 6.6%. to 5.75 percent, as shown in the table below. The calculation applies to an apartment that is inhabited for a full 12 months of the year and purchased without a loan. It includes costs such as agent's commission (3%), PCC (2%), notary fee and extracts, refreshment after purchase, furniture, periodic expenses for refreshment and minor repairs, real estate insurance and flat-rate tax (8.5%). .

Profitability of an investment in an apartment and the equivalent deposit interest rateExpander and Rentier.io

Warsaw is the most expensive city to live in Poland

Experts also analyzed the income that remains in Poles' pockets after paying the rental costs. The analysis shows that Warsaw is the most expensive city. “For a premises with an area of ​​50 m², the average cost is PLN 3,784. For comparison, in Krakow it is PLN 3,163 and in Gdańsk – PLN 3,215. The standard of living of a tenant in Warsaw, understood as income after paying the rent, is clearly lower there than in Krakow or Gdańsk.” – we read in the report. At the same time with Central Statistical Office data shows that in April the average salary in Warsaw was PLN 10,044 gross and was lower than in Kraków and Gdańsk, where it amounted to PLN 10,652 and PLN 10,200, respectively.

The authors add that in tandem with an income of 80 percent. average salaryrenting a 50 m² apartment at an average price, in Warsaw, the amount left for living is PLN 7,700, in Gdańsk PLN 8,440, and in Kraków PLN 8,984. In turn, in Bydgoszcz PLN 8,657, and in Katowice PLN 8,551.

Lease costs in May 2024Expander and Rentier.io

Main image source: Jan Zwolinski/Shutterstock



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