In the fourth quarter, the number of unique apartment rental offers across the country dropped by as much as 30%. There are cities where the decline is much greater, for instance, over 40% in Łódź. Experts from GetHome.pl checked what impact this could have on rent prices.
“The number of apartments on the rental market is currently little more than at the end of 2022. However, their offer then shrunk significantly due to the influx of refugees from war-torn Ukraine,” says Marek Wielgo, expert of GetHome.pl. He refers to Adradar, a real estate portal search engine, which shows that at the end of last December, there were about 60.5k unique apartment rental offers throughout the country, which is 30% less than just three months earlier.
One can, of course, explain this by saying that the market has been “cleaned up” by students. We face a similar phenomenon every year at a similar time. However, this time both the decline in supply and the number of apartments introduced to the rental market were much larger. In December, there were only about 33.8k of them, which is the worst monthly result in the last four years.
The GetHome.pl expert notes that until September of last year, the offer of rental apartments in all the largest metropolises was growing, but in the fourth quarter, it collapsed. Meanwhile, Adradar reports that in Warsaw, there were about 12.5k apartments waiting for tenants at the end of December, which is 27% less than in September. The same is in Katowice. And in Łódź, the offer shrank by 41% in the fourth quarter, in Poznań – by 37%, in Gdańsk – by 36%, and in Krakow and Wrocław – by 31%. “Perhaps some apartment owners abandoned this business and put their investment apartments up for sale. Moreover, there were fewer investors allocating their financial surplus to rental apartments. Especially since last year the demand for rentals slightly subsided,” adds Marek Wielgo.
According to him, such a large supply shock in the fourth quarter is worrying as it may herald rent hikes, which clearly slowed down at the beginning of last year. According to AMRON-SARFiN, in the first quarter, average rent rates in Wrocław, Gdańsk, and Krakow dropped by about 2%, and in Warsaw, Poznań, and Katowice – by about 1%.
AMRON-SARFiN has not yet released data for Q4 2024, but already in Q3, the average rent in Poznań was 3.5% higher than three months earlier. Meanwhile, in Wrocław, the average rent rose by 3%, in Warsaw – by 2.6%, in Katowice and Łódź – by 1.5%, in Kraków – by 1.4% and in Gdańsk – by 0.8%. It is worth noting that in Q2, average rents in Warsaw, Wrocław, and Łódź were lower than at the same time a year earlier.
The GetHome.pl expert estimates that demand will likely increase this year, with the main reason being the costliness in the housing market and still expensive loans. In this situation, one must expect higher rent increases than last year. Although of course one should be aware that average rent rates also increase when the supply of rental apartments shrinks and the cheapest ones disappear first.
Let’s add that in the case of rental contracts concluded for longer than a year, the apartment owner can increase the rent by the average annual price index of consumer goods and services announced by the President of the Central Statistical Office (GUS). This year, the rent indexation increase cannot exceed 3.6%. Recall that last year it could reach up to 11.4%.
However, when renewing a one-year or shorter lease, the apartment owner can increase the rent arbitrarily. Of course, as long as the market situation allows it.
Just last year, owners couldn’t afford very high hikes. According to GUS, fees for apartment owners increased on average “only” by 5.1%. Thus, this type of “indexation” was more advantageous for tenants than the inflationary one.
It is worth remembering that until 2022, multi-year rental contracts, with annual inflationary rent increases, were a better option for tenants. Market rents were skyrocketing. The exception was 2020 when due to the COVID-19 pandemic, many renting apartments were forced to lower rents.
Author: GetHome.pl
Source: https://managerplus.pl/spadek-ofert-mieszkan-na-wynajem-w-polsce-czynsze-w-najwiekszych-miastach-rosna-eksperci-prognozuja-dalsze-podwyzki-w-2025-r-37131
