The end of the year in the rental market brought no surprises and the expected slowdown. Seasonal downward trend was visible both in the 13% m/m lower number of searches and the lowest number of new listings added over the year. Meanwhile, average rental fees remained at around PLN 3600. Looking at the whole of 2023, it can be seen that the rental market has returned to equilibrium. Will it maintain this balance in 2024?
The last quarter of the year is usually a period of seasonal slowdown in the rental market. December 2023 was no exception, with reduced activity visible on both the renters’ and landlords’ side. During this period 23% fewer new ads were added than a month earlier, and at the same time the least throughout 2023. However, it should be noted that despite a temporary supply decline of rental apartments, the base of available offers in most cities was over 50% larger in December than a year earlier.
The temporary downward trend in the rental market in the last month of the year was also evident in the number of closed listings (-14% m/m) and in the over 20% lower churn, that is the number of new listings compared to November, but closed by the end of the month (5.1k vs. 6.5k). Interestingly, the number of reactivated ads rose by 5% m/m in December. This may indicate that some landlords have once again put their apartments up for rent, expecting increased tenant interest at the start of 2024.
With the arrival of the new year, many tenants decide to change their current apartment and look for more favorable offers in terms of location, price or selected parameters. Therefore, we usually see increased activity on the rental market in the first months of the year and a rebound after the quiet end of the year – emphasizes Karolina Klimaszewska, Senior Analyst at Otodom.
Prices have slowed down, but…
A 13% decrease in tenant interest in December compared to November halted the rise in rental prices. In the last month of the year, the average asking rent remained at around PLN 3600. The least, on average to 2 thousand. PLN, had to be paid by those looking for a rental apartment in Kielce and Bydgoszcz. As usual, the most expensive city was Warsaw, where tenants had to expect an expense exceeding on average PLN 5,000. Meanwhile, in cities such as Katowice, Lublin and Rzeszów, the average rental rates hovered around PLN 2.5-2.6k.
Annually, it’s fair to talk about a moderate, five-percent increase in average rental prices. However, the rental price per sqm increased by 7% y/y. In 2023, the number of apartments offered in prices from PLN 20 to PLN 50 per sqm shrunk, and the proportion of apartments in the price range of PLN 50-65 per sqm and above PLN 65 per sqm increased.
The apartments offered in the rental market are becoming more compact while maintaining a certain number of rooms. Besides, the rates per sqm have increased compared to last year, which means that despite the relatively small increase in average rental prices y/y, tenants in the given budget can afford to rent a smaller apartment than a year ago – explains Karolina Klimaszewska from Otodom.
The future is uncertain
Following the pandemic period and the outbreak of war in Ukraine, it can be seen that the rental market in 2023 regained its balance and returned to its classic operational cycle. The base of available rental apartments has been rebuilt and was comparable to that of 2028 and 2019. Meanwhile, demand was similar to the “standard” years. Can we therefore expect further stabilization in the rental market in 2024?
The situation in the rental market is strongly linked to the situation in the apartment sales market. As we still often treat the rental market as a “stopover” on the way to our own property. The more favorable the situation for borrowers, the more people decide to buy property either for themselves or as a rental investment. The availability of mortgage loans is therefore one of the factors that will definitely influence the rental market in 2024 – summarizes Karolina Klimaszewska, Otodom.
