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    Record expensive year on the rental market in Poland

    In Gdynia, Białystok and Sopot, rents in the first half of this year rose by around 40, 38 and 36 per cent respectively, compared to the previous six months, according to the latest report. The smallest increases were in Warsaw and Poznań – they did not exceed 20 per cent, it was added.

    “The influx of refugees and decreasing creditworthiness of Poles caused a revival in the rental market in the first half of this year,” we read in the Evaluer Index IH 2022 report by Emmerson Evaluation.

     

    As indicated, in the 13 cities analysed, those willing to rent had to pay on average around 28 per cent more than at the beginning of the year.

     

    The largest increases in rents in H1 2022 were recorded in Gdynia, Białystok and Sopot – by 40.1 per cent, 38.4 per cent and 36 per cent, respectively, compared to the previous six months. The smallest increases took place in Warsaw and Poznań, only here they did not exceed the 20 per cent threshold, reaching 18 per cent and 18.4 per cent, respectively, it was written in a press release on the report.

     

    Over the six months, rental rates for flats rose by 24.4 per cent in Lublin, 33 per cent in Rzeszów, 31.9 per cent in Krakow and 23.5 per cent in Łódź.

     

    While many flats stood empty during the pandemic, the war across the eastern border and the influx of refugees have definitely revived the rental market. Ukrainians, who had the opportunity to rent units for cash, drove demand and thus also rental rents. In addition, interest in the rental market increased due to the decreasing creditworthiness of Poles,” points out Emmerson Evaluation board member Robert Korczyński.

     

    In his opinion, increased rental costs were also influenced by increases in interest rates and maintenance costs. Some of the flats for rent are bought on credit, so in order to offset the rising WIBOR, the owners had to raise the rental rates of their units, he added.

     

    The report shows that in the first half of the year, average rental yields were between 3.6 per cent and 5.7 per cent.

     

    The highest yields were in Katowice. Rates of return were high here for all types of flats. They reached 4.9 per cent for 1-rooms, 5.5 per cent for 2-rooms and 5.4 per cent for 3-rooms, it was stated. As added, another profitable city was Łódź, with the highest rate of return (5.7 per cent) for 1-room flats among the analysed cities. Slightly lower returns were generated by flats with two and three rooms (4.8 per cent and 5.2 per cent respectively). The rental market did well in Szczecin, where returns reached between 4.7 and 5.3 per cent.

     

    The most profitable cities in the Tricity market are Gdańsk and Gdynia, where yields are in the range of 4.2 per cent to 5.1 per cent. On the other hand, the lowest level among the cities analysed in the report was in Białystok (3.7 – 4.1 per cent), according to the report. In the case of Warsaw, the units yielded between 3.8 and 4.4 per cent, and in Krakow – 4.5 per cent.

     

    The authors of the report point out that this year, people who do not have their own flat “have faced quite a problem”, as both obtaining a mortgage and renting a flat may prove difficult.

    The cost of borrowing at such high-interest rates is a very heavy burden on the household budget. In addition, many people find it difficult to obtain financing or their creditworthiness is not high enough to buy their dream flat. At the same time, rental prices for flats have increased and the offer has shrunk sharply in the face of demand from refugees from across the eastern border.

     

    According to Korczynski, increased rental demand should be expected in October, when students, a significant group among lessees, return to university. This could provide another reason for rising prices, especially as the number of available rental ads is low, he assessed.

     

     

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