After the New Year’s surge in the rental market, February saw further rebuilding of the rental apartment base. By the end of the month, there were over 27,000 active listings – 5% more m/m and 34% y/y. Additionally, Otodom’s data from the beginning of the year regarding availability suggests that this year can break records in terms of supply compared to the last few years. At the same time, there is also a continued slowdown in the annual dynamics of rental prices. The average rent in provincial cities remained similar to January’s level and was almost PLN 3,600.
In February, the high level of interest in rental apartments remained visible. Each year, after the New Year’s peak in the rental market, the activity of potential tenants drops slightly. However, this year the decrease was only 8%, compared to previous years’ 16%. This suggests that tenants, while looking for the best deals, try to keep an eye on the database of advertisements on a regular basis. Last month, the number of searches for rental apartments on Otodom reached nearly 1.5 million – a 17% increase y/y.
The slightly lower interest from tenants in February is also indicated by the level of advertisement rotation (i.e., the number of ads published during the entire month that was removed from the site before February 29, 2024). It reached 6.7 thousand, which was 14% lower than in January.
People looking for a rental apartment could not complain about lack of options in February. Throughout the month there were 49,000 listings, and at the end of the month 27,000 were active. Although it is a small increase compared to January’s (+5%), it is clear when looking at the size of the base over the past few years, that potential tenants’ situation has markedly improved in most provincial cities.
Łódź turned out to be the unquestionable leader in terms of the development dynamics of the rental base; over the years, the number of rental offers on the local market increased by as much as 121%. Long-term growth was also seen in Warsaw, where over 13,000 offers were active in February – 16% more than in 2019, before the pandemic and the war in Ukraine. Other major cities such as Wrocław, Poznań, and the Tricity area also saw a 20-50% increase in supply.
However, Krakow remains the exception to the rule. Despite the national base of rental apartments having grown steadily over the past few years, the Małopolska’s capital struggles to rebuild the rental options. This is due to two factors, according to Karolina Klimaszewska, Senior Analyst at Otodom. Firstly, Kraków has one of the largest bases for short-term rentals in Poland, so a large portion of available apartments do not reach the traditional rental market. Secondly, new supply of apartments in the development sector is insufficient in this city.
The impact of the reduced rental options in Krakow has been observed since the fourth quarter of 2021 when the number of listings dropped by more than 48% in three months, to the level of 4.4 thousand. It was only in February this year that Krakow significantly exceeded the 5,000 active offers mark. However, this is still approximately 1.5 thousand less than the average from 2018-2019 and far less than needed to rebuild the city’s wide choice of long-term rentals.
In the last month, the number of newly added listings increased significantly in Katowice and Białystok – up by 17% and 14% respectively. Kielce (-4%), Zielona Góra (-3%), and the Tricity area recorded decreases. In monthly terms, the Tricity’s base shrunk by 3%, likely due to a shift from long-term to short-term rentals in anticipation of the May holidays and the summer season.
The average rental prices continued to slow in February, with Rzeszów being the exception. This month, provincial cities saw an average rent of close to PLN 3,600 on average, i.e., 0.5% less compared to January. Rzeszów saw the biggest drop in prices, decreasing by 5%. As a result, local renters had to pay an average of PLN 2,500. This, however, is still more than in other cities on the eastern side of the country, or even in Poznań or Katowice.
The decline in average prices in Rzeszów is due to the structure of the local rental market. During the month, the number of apartments up to 40 sq m increased by 26%, and medium-sized ones (from 40 to 60 sq m) increased by 13%. Additionally, the average rental rate in the smallest apartment segment dropped by about PLN 80, affecting the price level of other properties.
On the other hand, only three provincial cities recorded a small jump in the average offer price – Poznań, Łódź, and Zielona Góra. In the first two cases, these increases were only around 0.5%.
“Average rental prices are clearly stabilizing. The number of apartments available for rent is recovering after the pandemic and the outbreak of the war in Ukraine, and it seems that this trend will continue in the near future. However, significant drops in rental prices are not expected. This is mainly due to the increasing costs of property maintenance and purchase, which means that landlords, wanting to maintain the profitability of renting, will continue to pass on some of these obligations to the tenants,” explains Klimaszewska.
What is the most popular choice of tenants? In February, in the largest cities, two-room properties were most sought after in budgets up to PLN 2,000 in Łódź, PLN 2,500 in Lublin, Poznań and Szczecin, and PLN 3,000 in the Tricity area, Wrocław, Kraków, and Rzeszów. Two-room apartments were also popular in Warsaw, but the preferred price range was between PLN 3,500-4,000.
