The development potential of the private rented sector (PRS) in Poland is very large, although it is only at an early stage, and the current offer includes approximately 6,500 apartments. In the coming years, we can expect a significant expansion of the offer, to at least 54,000 in 2026. It is very likely that due to the entry into the market of new entities and new acquisitions, this number will turn out to be much higher, according to the report entitled “Institutional lease – a permanent trend, not a fad” developed by PwC Polska.
“Flats and warehouses (so-called beds and sheds) have been the subject of the greatest interest of investors in the last two years. A novelty that is dynamically developing on the housing market are apartments in institutional lease, popularly known as PRS (Private Rented Sector). emerging PRS market in Poland, noticed by both foreign investors and local developers,” said partner of PwC Polska and leader of the real estate services team, Kinga Barchoń, quoted in the report devoted to the report.
The potential for the development of the institutional rental market in Poland is very large. In Poland, it is at an early stage, the current offer includes approximately 6,500 apartments. In the coming years, we can expect a significant expansion of the offer, to at least 54,000 in 2026. It is very likely that due to the entry into the market of new entities and new acquisitions, this number will turn out to be much higher. The PRS market has strong grounds for growth, the most important of which are the housing gap in large cities and the declining availability of housing, it was announced.
As PwC points out, the decline in the availability of housing will be particularly noticeable in the near future due to the recent increases in interest rates, limiting the creditworthiness of apartment buyers.
Over the last 10 years (2010-2020), in most European Union countries, apartment prices have grown much faster than rental prices. As a result, renting a flat has become more favorable than buying a flat. In the case of Poland, the discrepancy between changes in apartment prices and rental rates is much smaller prices increased by 40% and rents by 33%, and by 2017 the increase in rent was higher than that of apartment prices, which began to catch up from 2018. At the end of 2020, the cumulative pace of growth of both categories was leveling off, and finally in By 2021, rents gave way to an increase in housing prices, it was further announced.
At the same time, PwC points out that remote work, which has become widespread due to the COVID-19 pandemic, may adversely affect the demand for apartments conveniently connected to the business centers of large cities – i.e. the profile of apartments from the PRS offer.
The sales results for 2021 reported by developers and operators do not seem to confirm the impact of the pandemic on their operations, but the following years may bring a change in this regard. In turn, the Russian invasion of Ukraine stimulated the rental market. The effects of the outbreak of the war on the economy of Ukraine and neighboring countries 2.4 million people emigrated from Ukraine to Poland in the first month after the Russian attack. sales and good prospects for the rental market create an environment for increasing the involvement of PRS funds in Poland, according to the report.
Source: PWC and ISBnews
Photo: ©Roberts Publishing Sp.zoo
