If only current prices are taken into account, is it more profitable to buy a flat or to rent it? The situation from the spring of last year, when landlords had several applicants for an apartment and could dictate any prices, is behind us. With current housing prices, even a 2% loan. it will not compete with the rental price everywhere.
In the last 12 months, rental prices per square meter have increased by 8.8%.. – analysts calculated in the Expander and rentier.io report. This is largely due to the influx of refugees from Ukraine. In large cities, flats sold out quickly, and tenants had no space to negotiate prices.
Prices rose the most in Rzeszów, where many Ukrainians stayed
The most, 18 percent. year on year, rates increased in Rzeszów, which is the largest city close to the border with Ukraine. by 16 percent prices went up in Warsaw, where a lot of refugees from the war areas came. Today, the most expensive flats to rent are in Warsaw (PLN 76 per sqm on average), as well as in Wrocław and Kraków (PLN 61 per sqm each).
However, this difficult situation for tenants is slowly changing. In some cities, prices fell: in Wrocław, rental prices fell by as much as 6 percent. year on year, and in Toruń by 3 percent.
“The availability of apartments for rent has definitely increased. In April 2022, we recorded only 18,000 active ads in the cities surveyed. In April this year, it was already 35,000, so almost twice as much. However, this is still less than two years ago (53,000)” – note the authors of the analysis.
What is the profitability of a rented apartment?
How does this translate into renters’ profits? On average, the return on investment in an apartment without a loan, taking into account all taxes and assuming rent for 12 months a year, is on average 5.4 percent. The most profitable would be to provide tenants with an apartment in Sosnowiec (6.1%), and the least in Poznań (4.8%).
Now let’s look at the other side, i.e. the interest of the tenant. Is it more profitable to buy an apartment with a preferential loan (the government housing support program starts in July) or to continue renting? According to the calculations of Expander and rentier.io for an apartment of 45 sq m, the first installment of the loan will be the most different from the rental costs in Szczecin. The buyer would save PLN 416 per month.
In Warsaw, a buyer for a preferential loan would save PLN 367, similarly in Sosnowiec, Łódź and Katowice. Buying an apartment is not profitable in Poznań, Białystok and Gdynia, where a loan with a preferential interest rate still loses to the cost of rent. Of course, the difference in the monthly installment is just one of the factors that the buyer of an apartment takes into account when buying. There is no reason to count on promotions on the market, there is no reason to assume that flats will somehow become significantly cheaper.