And although it might seem that the increase in prices per square meter in most Polish cities, in conjunction with the completion of programs supporting young people in buying their own apartment should have an impact on market trends, analysts believe that this situation should not take place.
According to the results described in mBank's January report on the real estate market, over the past decade we not only noticed a substantial increase in the availability of apartments, but also the demand for their purchase will continue to grow. This is also confirmed by the data of the National Bank of Poland, which in the summary of the first quarter on the domestic market noted that in the reporting period it was still in a high activity phase, despite the observed acceleration in price growth, and the number of sold contracts for the construction of apartments was at a level comparable with previous quarter. In the case of the secondary market, the NBP noted, however, that it can be seen that buyers do not fully accept such high costs, which confirms the discrepancy between average transaction and offer prices. Interestingly, based on average rates per square meter in major cities, it can be seen that buying real estate on the primary market was more profitable than in the case of those on the secondary market. According to OtoDom, in the capital, an average of 10.6 thousand was paid per square meter in the secondary market. PLN, while on the primary market it cost about 8.4 thous. zł. A similar situation took place also in Gdansk, where the difference on the metro was less than 1000 PLN. What's more, given the average prices per sqm. in June and May this year. on the primary market, even slight decreases can be observed. Following the OtoDom service, in Warsaw this difference was 1.4%, and in Gdansk it was almost 5%.
However, it is worth remembering that the constant, high demand for flats induces developers to keep prices rising and without a clear signal from buyers (both investment and those who buy for their own needs), this state of affairs will not change. In practice, this means that investing in real estate itself is becoming more and more risky, but by devoting it to rent, you can still count on high returns. In addition, analysts reassure that even if the price growth and the number of flats sold slow down, there is no crisis comparable to that of 2008, especially since the percentage of flats since 2013 has risen comparable to earnings. However, the situation that will prevail in the real estate market next year remains unknown, because a lot depends on how, among others the Polish economy will develop, demographics is also important. So if you plan to buy an apartment, where is the best investment? Certainly in large or developing cities, those that are a tourist attraction or a business center. In their case, we can easily allocate their property for rent, not just long-term.
Situation on the property rental market
Based on the aforementioned mBank report from January this year, rental prices in the largest cities are still rising, and its profitability invariably exceeds other alternative ways of investing. Analysts also pointed out that as long as interest rates remain stable, there is a small chance that the owners of the premises decide to sell them, especially that instead of renting them long-term, they can spend them on rent for days, allowing higher revenues per year . As we mentioned in one of the earlier articles, with the support of a professional manager, the owner of the apartment can count on an annual income of up to 60 thousand. PLN, although it should be borne in mind that this amount depends on many factors, including the nature of the apartment or its location.
However, the forecasts in this case are optimistic. According to the results of the Emmerson Evaluation report, the number of hotel facilities increased in 13 voivodships, where in the first half of 2018 the highest growth was observed in the Dolnoslaskie, Lubuskie and Lubelskie voivodships. In turn, the largest increase in new beds took place in the Lodzkie Voivodship - 11.1%, i.e. over a thousand new beds compared to 2017. Considering also two important factors used in assessing the situation on the tourist market, i.e. ADR (average price per night) and RevPAR (average income from one available room), the previous year also brought higher results than it had in previous years. Comparing these data with the results of the 2018 Report: Hotel Market in Poland, which presents the most important data on weekend tourism and what its supporters expect, apartments for short-term rental seem to fully meet these expectations.
Why an apartment and not a hotel?
What additionally speaks in favor of the apartments and makes them stand out from the standard hotel offer is definitely higher comfort of stay, a sense of privacy and independence. These factors combined with modern interior, full equipment, great location and comparable price make them a much more attractive proposition for both tourists and people visiting the city for business purposes. In addition, as also emphasized in the Emmerson Evaluation report, statistics on tourists from Poland and abroad are increasing year by year, which only confirms that Poland is a great choice for investors looking for interesting, alternative sources of income in the form of short-term rental apartments. In addition, bearing in mind the results described in the said report, the greatest interest in terms of purchasing apartments and then allocating them for rent for days is characterized by coastal towns. Defined as holiday apartments, in comparison with condo facilities, they constituted on average as much as 46% of all identified for the needs of the aforementioned study, although in some places (such as in the West Pomeranian Voivodeship) it was even 75%. For comparison, in mountain regions it is about 40% - we are talking about cities such as Zakopane, but also Swieradow - Zdroj, Szklarska Poreba, Polanica - Zdroj and Szczyrk. It is forecast that next year the largest number of such facilities will appear there.
Equally important, for the needs of the said study, in terms of condo hotels and apartments intended for rent, the largest Polish agglomerations were also analyzed, in which as many as 70% of the supply are apartments for short-term rent. Cities such as Warsaw, but also Krakow and Wroclaw lead here.
It can therefore be concluded that the situation not only on the tourist market, but also in general real estate is conducive to the purchase of apartments, and the allocation of them for short-term rental gives a real chance to generate income that will cover not only the cost of mortgage installments.