Rents are up, and not only municipal rents. Experts warn: It will be more expensive

Reconstruction indicators announced by voivodes have increased significantly. According to experts, this may translate into higher rents, also in the private sector.

– Reconstruction indicators announced by voivodes have increased by several or even a dozen or so percent. This will impact possible rent increases. And it’s not only about municipal premises – say experts from the Gethome.pl website.

This doesn’t sound good! And although the replacement indicators announced by voivodes have recently been associated mainly with loan subsidies and government programs, their primary role is to set a limit for easy rent increases.

– That is why it should be noted that there have been recent increases in the conversion rate of the replacement cost of 1 square meter of usable area in residential buildings. For example, such an indicator calculated for Warsaw recently increased by 11%. (up to PLN 12,149). In the case of Poznań, a similar increase from the beginning of April this year. was 10 percent – explains Andrzej Prajsnar, expert of the GetHome.pl portal.

What’s the deal with cost metrics?

Cost (replacement) indicators are intended to regulate the level of rents and limit their too rapid increase. They determine how much it costs to build 1 square meter of apartment in a given voivodeship. Importantly, they are updated every six months.

It is worth mentioning the six most important protective principles arising from the Act on the Protection of Tenants’ Rights:

Notice of the rent amount must be given in writing at least 3 months in advance.
Increases cannot be introduced more often than once every 6 months.
As a rule, the annual rent should not exceed 3%. replacement value of the apartment.
The replacement value is calculated as the area of the premises multiplied by the index published by the voivode.
Exceeding the 3% limit. may be considered acceptable if the increase is within inflation.
A higher rent is also possible if the owner demonstrates the need to cover the costs of maintaining the premises and ensure a return on investment (except for social rent, where there should be no profit).

Replacement indicators and rent increases

As experts from the GetHome.pl portal explain, the topic of replacement indicators in the context of renting is most often related to the stock of municipal apartments.

– This is a paradox, because in practice municipalities set rents for their premises at a level much lower than the 3% threshold. replacement value, setting the limit for easy rent increases. For example, in Warsaw this three percent threshold per 1 square meter is currently approximately PLN 30 ((PLN 12,149/sq m × 3%)/12). In turn, the base rent rate for municipal premises in the capital is currently PLN 13.55/sq m, and for social rent – PLN 2.00/sq m – says Andrzej Prajsnar.

As he points out, in other cities it is also common to see rent rates lower than 1.5%. replacement value of the municipal premises. What is the reason for this? According to the expert, not only social considerations are important, but also problems with rent enforcement.

– Let us recall that at the end of 2024, after deducting vacancies, every second municipal apartment was in debt. A large rent increase would probably make repayments even worse. So, are the recent changes in replacement rates irrelevant for municipal tenants? That’s a hasty conclusion. For the commune, a higher value of the replacement index may be an argument to increase the rent – in order to maintain a constant level, e.g. 1.2-1.5%. replacement value of the apartment – notes an expert from the GetHome.pl portal.

Limits also for private rentals?

Experts from the GetHome.pl portal remind that the described rules for increasing rents do not apply to occasional and institutional rentals.

The question is: what about an “ordinary” apartment rental from a private or corporate owner?

– Here, the regulations do not indicate the exclusion of limits on the frequency and amount of rent increases. In practice, however, the importance of the above-mentioned limits is effectively limited by the popularity of short (e.g. one-year) lease contracts, as well as the ignorance of the parties to the contract. Let us also remember that there is not always a situation on the rental market that justifies rent increases, notes Prajsnar.

FAQ – frequently asked questions about replacement indicators

What are recovery indicators?

These are data showing how much it costs to build 1 square meter of apartment in a given voivodeship. They serve, among others, to regulate rental rules.