Generation Z will change the rental market in Poland, which will become more professional
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Eurostat data shows that 84.2% of Poles live in their own flats. However, the trend in many European countries points to the growing importance of renting. This can also be seen in Poland. CBRE data shows that in September 2020, 28% of residents in the largest Polish cities rented a flat. This solution was also used by every fourth young person. Experts from CBRE indicate that the growing interest in renting, generated especially by the youngest Generation Z on the labour market, will cause the market to become more professionalised in the next decade.
– Currently, the supply on the rental market is created mainly by small investors, who invest their savings in two to three flats counting on profits. In the next ten years, however, professionalisation is expected, which will be a consequence of, among other things, expanding the supply in the hands of institutional investors. The first of them have already appeared on the Polish market, others are in the process of preparing their first transactions. Various models of entering the market are being tested, from purchasing packages of ready flats, through forward purchase and forward fund transactions prepared for the client, to taking over development companies with their land bank, knowledge and experience – says Marcin Jański, head of the alternative real estate sector at CBRE.
Rental market 2030
Generation Z, which is currently just entering adulthood, will begin to shape the labour market, future trends and social changes. In 2030, they will already be a generation of young, experienced professionals with their own capital. Research suggests that they will be much less attached to the idea of owning a home outright, especially at the cost of a long-term loan commitment, than any of the older generations. The latest Eurostat data summarising 2019 shows that 84.2% of Poles occupy a home that belongs to them or others in the same household. A further 11.6% live in rent-regulated or rent-free accommodation, while 4.2% of Poles use rent. The scale is different, however, when looking at the detailed data. A CBRE survey conducted in September 2020 shows that in the largest Polish cities, 28% of residents use free rent. This option is also used by every fourth young person.
Factors that will popularise renting
The main factors that will increase demand in the rental market are demographic and social changes, including, among others, shrinking households, increasing age of marriage, weakening intergenerational ties, greater mobility of younger generations and their lower propensity for long-term commitments, such as a mortgage. Not without significance is also the growing phenomenon of economic immigration to Poland and the associated growing number of foreign students. Estimates of the National Bank of Poland indicate that before the pandemic there were even approx. 1.3 million workers from Ukraine. However, in 2018, the percentage of foreign students at Polish universities reached 6.3%, while 10 years earlier it reached only 0.8%.
– It is also worth mentioning the developing phenomenon of sharing economy, whose main premise is precisely that you don’t have to own something to enjoy using it. BlaBlaCar and Airbnb, among others, have taught us this. Young people have got used to using this type of services and nothing stands in the way of transferring this philosophy to the style of living – says Marcin Jański.