Apartment rentals in Poland in the third quarter of 2023

The supply of apartments for rent has increased

The supply of apartments for rent has increased

The average weekly supply of new apartments for rent in Poland is growing. In the 17 largest cities, the supply of apartments increased by an average of 6.5% y/y and 21% q/q. The highest growth was recorded in Lodz and Wroclaw, where the average number of new listings per week increased by 22% compared to the second quarter. A significant increase in the supply of new apartments is a seasonal factor associated with the beginning of the school year. At the same time, due to the observed decrease in the number of offers for the sale of apartments (by 5% y/y), it can be assumed that more and more people are deciding to rent their own apartment.

The largest average weekly number of rental offers for new apartments in the 3rd quarter of 2023 is in Warsaw - 2247, Krakow - 1184, Wroclaw - 608, Poznan - 532, Lodz - 452. Other cities lag significantly behind.

Stabilization of rental prices

The average increase in apartment rental prices did not exceed 1% sq.m. and 3.5% y/y. In the four most expensive cities – Warsaw, Gdansk, Wroclaw and Krakow – prices increased by an average of 2% q/q. In other cities, the average quarterly price increase did not exceed 0.5%. Warsaw remains the most expensive, with apartment rentals costing an average of PLN 4,225. It is followed by Gdansk - 2988, Wroclaw - 2952 and Krakow - 2925 zlotys.

From 2.7 to 2.0 thousand zlotys is the rent in cities such as Gdynia, Szczecin, Poznan, Katowice, Lublin, Rzeszow, Opole. Tenants in the cities of Zielona Gora, Lodz, Bialystok, Olsztyn, Kielce, Bydgoszcz pay less than 2 thousand zlotys.

Apartment rental yield in Polish cities in 2023

In most major cities, rental yields have been falling since the beginning of 2023. This is due to the stabilization of rental prices and rising apartment sales prices. The largest decrease in profitability was recorded in Lodz (by 0.9 percentage points) and Wroclaw (by 0.6 percentage points). In Lodz, despite the biggest decline, rentals are still the most profitable at 7% y/y. On average, the six largest cities have rental yields of approximately 6% (table). The same figure is in the capital of Poland.

Smaller apartments have higher rental yields

The so-called “micro-studio apartments”, i.e. premises with an area of less than 25 m2 are characterized by the highest rate of return - an average of 7.2%. Larger apartments bring a lower return on investment per m2, hovering around 6%. The higher yield index for smaller apartments explains why Łódź has the highest rental yields. Apartments of up to 25 m2 here make up almost 14 percent of new rentals in this city, and across all major 17 cities this percentage is 6.5%.

Against this background, the relatively high profitability of the largest apartments (from 90 m2 in area) may surprise you. The high profitability of large apartments may be due to the relatively low price of such apartments per 1 m2.

The profitability of renting apartments by area in the largest cities in Poland in the 3rd quarter of 2023 is as follows: apartments up to 25 m2 have a profitability of 7.2%, apartments with an area of 25-40 m2 - 6.0%, 41-60 m2 - 5.6 %, 61-90 m2 - 5.7%, apartments with an area of over 90 m2 have a profitability of 6.2%.

Source: website pie.net.pl