How many new flats are coming onto the rental market?
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In 2020, development companies began the construction of over 130,000 apartments. The gethome.pl portal estimated how many of them may hit the rental market – no less than 1,241, because this is the number of units for construction was declared last year by developers in their reports for the Central Statistical Office. Though most likely the actual number of the flats entering the market will be much higher.
The Polish rental market is dominated by individual landlords. On the basis of tax returns published by the Ministry of Finance, containing income from rental or lease, rental expert Hanna Milewska-Wilk estimates that in 2019 flats were rented by over 727.3k. taxpayers paying the flat-rate tax (8.5% and 12.5% on revenues above PLN 100,000). A year earlier, there were nearly 637.7k, i.e. 89.6k less. Some landlords settle accounts with the tax office on general terms, such as approx. taxpayers in 2018 – some people, however, do not want to share the profit.
In addition, there are also flats rented by institutional investors. According to the ThinkCo experts, institutional investors have a total of approx. 4.5k. apartments for rent throughout the country, and according to Hanna Milewska-Wilk, there may be approx. 1.2 million apartments for which tenants pay market rent. However, it is not clear from CSO data how many of them were bought by individual investors on the primary market and how many on the secondary market.
In 2020, investors added 1,343 apartments for rent for use and started the construction of 1,241 such apartments, according to the CSO data – i.e. only 0.9% of all started development apartments. Last year’s results are worse than those for 2019. However, the real numbers may be higher – the ones from the CSO most likely fail to fully reflect the reality, since the Central Statistical Office only takes into account the premises under construction for rent developed by investors, while investors usually buy apartments for rent in development projects.
An interesting example here are the investments of the PFR Nieruchomości company, carried out under the government’s housing program.The company announced the start of construction of 512 apartments for rent in 2020 in Torun, Zamosc and Lowicz. It is possible that 274 apartments from Olawa and Nowy Targ will also be included in the CSO statistics for last year. On the other hand, the statistics will not include 138 apartments for rent in Mińsk Mazowiecki, near Warsaw, which PFR Nieruchomości will buy after construction from local developer PHU Partner, as well as 481 apartments in Krakow from Bartel Development and 100 apartments bought in 2021 from Everest Development in Wrzesnia.
The rental markets in the largest agglomerations are facing significant changes – individual investors buying single apartments will decrease – in addition, the demand for such premises has decreased as a result of the COVID-19 pandemic, and cities with a large student population, such as Kraków or Warsaw, have suffered thanks to distance learning at universities. In fact, this situation will change with the widespread vaccination of the population, but single landlords will still face competition from companies and funds offering a large pool of apartments for rent and professional service. According to experts at ThinkCo, institutional investors in 2023 will offer 11,000m2 in the largest agglomerations. apartments for rent, and four years later, there will be as many as 37,000 – this is a very realistic forecast, taking into account the participation of several dozen developers in the PRS (Private Rented Sector) conference organized by the Polish Association of Developers.
In addition, in the last three months, the Swedish company Heimstaden Bostad informed about the purchase of 1287 apartments in Warsaw, 640 of which are built-to-rent by the real estate developer Eiffage Immobilier, and the rest will be sold by Marvipol Development. In 2020, the Wrocław-based development company Vantage Development was taken over by the German company TAG Immobilien, which intends to buy or construct up to 8-20k in the next five years. apartments in Poland. Vantage Rent also intends to put up 235 apartments for rent in Poznań in 2022, the company also envisages an investment involving the construction of about 240 apartments for rent in Lodz.
Institutional investors are interested only in the largest cities which, due to the attractiveness of local labour markets, have good demographic prospects. Due to the growing credit requirements of banks and rising apartment prices, more and more Poles will be forced to rent. Among the tenants, an increasingly growing group are specialists with good earnings, who, despite good earnings, do not decide to buy, due to the necessity of frequent changes of residence due to the nature of their work. Therefore, the popularity of rental in Poland, which is small compared to Western European countries, is to increase.