Interest in studio apartments for sale is increasing. Their share in the total number of searches has increased by 1 percentage point over the past year. This translated into a more than 150% year-on-year increase in the number of inquiries in 15 Polish provinces. Interestingly, it turns out that tenants do not entirely share the enthusiasm of buyers for such apartments. The popularity of the smallest units for rent is not increasing to the same extent, and in some regions of Poland it is even falling. Does this mean that purchasing a studio for rental purposes may become a less attractive form of capital investment?
Studio apartments, which are single-room flats with a kitchen or kitchenette and a bathroom, have gained popularity among potential buyers. In February their share in the total number of apartment searches for sale on the Otodom website was 1 percentage point higher than the previous year. During this time, the share of 2-room apartments increased by 2.5 percentage points, while those with 4 or 5 rooms remained at a similar level to the previous year. On the other hand, it fell by 3 percentage points for properties with more than 5 rooms.
The continued higher interest in apartments for sale is the effect of, among other things, last year’s revival caused by 2% BK (mortgage lending rate). In February 2023, interest rates were still at a historically high level, which drastically limited the demand for mortgages, and thus – the purchase of apartments. However, this year, despite the expiration of the government program, potential buyers are in a much more advantageous position. And they increasingly direct their attention to compact apartments.
In February, the number of inquiries about studios on the Otodom website was as much as 130% higher than a year earlier. For comparison – compared to the previous year, two-room apartments were searched for almost twice as often, 3-room apartments 80% more often, and four-room apartments 73% more often. What’s more, according to Otodom data, the number of searches for studio sales increased compared to last year in all regions of Poland. The strongest, up by over 150% year on year, in Podkarpacie and Małopolska. More than twice as many inquiries about such apartments were noted in seven provinces (Mazowieckie, Lubelskie, Pomorskie, Podlaskie, Śląskie, Świętokrzyskie, and Warmińsko-Mazurskie). The smallest increase in interest, of “merely” 60% year-on-year, was observed in Opole.
One factor influencing the popularity of studios is their compact form, meeting the needs of a wide range of buyers, such as students, singles, couples, and older people. The second is a correspondingly lower price than for larger apartments. Thanks to this, studios easily qualified for the credit subsidies program. In addition, lower total purchase costs encourage individual investors to choose the smallest apartments, which later supply the rental market. – notes Karolina Klimaszewska, Senior Analyst at Otodom.
High interest in studios among individual investors may also indicate the level of available offers in the sale and rental categories. In February, the number of smallest apartments for sale in almost half of the provinces was 12-30% lower than a year earlier. Meanwhile, the number of studios for rent increased in most of them by 9–70% year on year.
Availability and offers in the market
In the sale offers, the smallest studios, not exceeding 30 sq. m, clearly dominate. In 2023, they represented 56% of the base of single-room apartments on the Otodom website. Slightly larger ones, with an area of 31-40 sq. m, were 37%. While studios with an area more than 40 sq. m are quite rare on the Polish market and appeared in only 6% of offers.
The most common are studios for sale located in new buildings – a whopping 53% are properties put into use after 2021. However, nearly a quarter of the offers in 2023 were single-room apartments in block buildings from 1946–1999.
Tenants prefer bigger apartments
There is slightly different interest in studios for rent. In most regions of Poland, their number of searches in February has increased, but much weaker than in the sales category. However, their share in the total number of searches, which is the most reliable indicator, fell in almost all provinces.
So is due to the changing preferences of tenants, can studios become less attractive for individual investors?
Over the last year, the prices of studios in the developer market have increased by an average of 11% and in the secondary market by 9.5%. Thus, single-room premises have gained in value. On the other hand, the rate of price growth in the rental market slowed down, with interest falling systematically in studios. This could suggest oversupply in this segment of the rental market, concludes Karolina Klimaszewska, Senior Analyst at Otodom.
