At the end of the first quarter of 2024, around 27,000 rental apartments were available in the market. However, tenants often find it difficult to find what they need. The offer includes mostly studio and two-room apartments, and there is a shortage of larger, four-room accommodations. “The rental market will have to adjust somewhat to the fact that tenants are not only young people and single-person households, but also couples, people with children or larger families,” comments Hanna Milewska-Wilk from simpl.rent. An interesting alternative are rental houses, which are becoming more and more popular in the market and are increasingly convincing tenants.
“The rental market mainly offers small apartments: studios, two-room, less often three-room, and very rarely four-room and larger apartments. Interestingly, whole houses for rent are also starting to appear on the rental market,” says Hanna Milewska-Wilk, a rental market advisor at simpl.rent, a start-up involved in, among other things, tenant verification and reducing rental risk.
The “Rental Yearbook” by Polityka Insight and the Otodom service indicates that in April of this year, 18% of rental apartments were studios and about 54% were two-room apartments. That’s nearly three-quarters of the offer. Almost every fourth apartment has three rooms, and the remaining 6% offer four or more rooms. Five years ago, at the beginning of the year, studios made up 15% of the offer, two-room apartments nearly 52%, three-room apartments almost 25%, and the remaining over 8%. This means that rental apartments have become even more compact.
Meanwhile, the report “Rent 2030 – Directions for the Development of Apartment Rentals in Poland” prepared by the ThinkCo team in cooperation with Otodom, PFR Properties and simpl.rent indicates that in Poland there is only 0.9 room per one tenant, while the EU average is 1.5 rooms. Families with children, who make up over 40% of tenants, are in a particularly difficult situation.
“We indeed have relatively few large, three-room and larger apartments available for rent in the market. This is partially due to the fact that in older resources, which were built for example in the 70s and 80s, there were significantly fewer three- and four-room apartments than two-room ones, and in new resources, which are currently being built by developers as well, apartments bought with the intention of renting them out are also small apartments,” explains the simpl.rent expert.
This makes it difficult for tenants to find what they need. According to the “Yearbook of Rent”, the market is strongly represented by two-room apartments with an area of 41-50 sqm (23% of advertisements) – this corresponds to only 15% of queries. In terms of availability, smaller two-room apartments with an area of 31-40 sqm, and larger three-room apartments, over 60 sqm, which comprise 30% of ads are in the next places. Tenants indicate such combinations in 11% of all queries with marked area and number of rooms.
Studios – which have an 18% share in the available offer – were searched for in 6% of queries. There is a shortage of larger, four-room apartments that tenants are looking for – in response to 16% of all queries they have only 5% of the offer to choose from.
“Tenants, if they can afford it, prefer two-room apartments to studios and this is slowly becoming visible in the offer. However, there is indeed an increasing number of families among tenants, also with children, and these people are looking for at least three-room apartments or houses, but these are definitely higher costs,” points out Hanna Milewska-Wilk. “I see an opportunity here in the fact that we will become accustomed to renting houses. On one hand, owners will want to rent them out, and on the other hand, tenants will want to take responsibility for the house, because it is a bit more work than with an apartment.”
Renting is definitely more difficult in cities with high tourist traffic, where many apartments are for short-term rental.
“It is relatively difficult for tenants to find an apartment that would be financially, in terms of size and location, suitable for their needs, for example to get to work easily,” says the expert.
The “Rent 2030” report states that households that spend over 40% of their monthly income on housing needs are considered housing-cost burdened. In Poland, this is the reality for many tenants. The authors of the report, citing Eurostat data, indicate that at the end of 2022, every fifth tenant in the commercial market was housing-cost burdened. Rents are significantly higher in the largest cities, where tenants earning below average are in particularly difficult situation.
“Rental prices are rather suited to people who have relatively high incomes, i.e. roughly average in the country. For families who need more space, renting apartments in big cities is very expensive or unaffordable for them. However, outside of big cities, rent is starting to be at more affordable prices and even families with children can afford to rent an apartment,” assesses Hanna Milewska-Wilk.
According to the Otodom report, in July this year, the average rental price for an apartment was PLN 3,548, which means a small increase of 1.2% compared to the previous month and 2.2% compared to prices from July 2023. The most had to be paid for renting an apartment in Warsaw – nearly PLN 5.1 thousand, then in Krakow, Wroclaw and Gdansk – around PLN 3.1-3.3 thousand. In Poznan, Katowice and Lodz, the average offered rental rates are in the range of PLN 2.1-2.5 thousand.
“The rental market prices are more adapted to how much people earn and how much they are able to pay. It is not the case that they are growing independently, because we see, for example, that at the moment the cost of loans, the current management of loans have increased a lot, but rental prices, if they were still growing in the previous two years, are now very stable or even decreasing, because it should also be remembered that the costs of maintaining an apartment are increasing for everyone. Rental prices will rather stabilize and even considering inflation, they will fall, because there are more and more apartments and houses for rent,” emphasizes the simpl.rent expert.
