Polish residential property market news H1 2022

The first half of 2022 on the residential property market in Poland was marked by inflation, rising interest rates and a boom on the rental market.

When in January the Main Statistical Office (GUS) announced that the average annual inflation rate (by which, among other things, rental rates are indexed) for the previous year was 5.1%, it was not easy to imagine that this value would be double-digit in the coming months. In June 2022 inflation was 15.6% (1.5% more than a month earlier). Inflation is expected to peak in August. The prices for fuel and food were the most expensive. We also note higher prices of services, including services provided for the real estate industry. High inflation means rising interest rates. In 2022, the Monetary Policy Council has continued increasing them, a trend that started in October 2021. At the end of 2021, the base rate was 1.75%, at the end of the first half of 2022 it is 6% and further increases to 7-7.5% are expected. Last time we had such high rates was in 2008.

The rising base rate has a direct impact on mortgage market. Since the beginning of 2002 we have observed rising mortgage payments and drastic reductions in potential buyers affordability. Its worth to mention that in Poland, a fixed mortgage interest rate is a relatively new and not very popular option, so changes to the base rate have a rapid impact on the property market.  The latter factor in particular has a huge impact on the sales and rental market. We are already seeing much lower demand for the purchase of an apartment with the number of advertisements for apartments for sale increasing. It is estimated that the value of granted loans decreased by approx. 40%

It is expected that decreasing mortgage affordability will push or keep potential buyers into rental market. And the rental market is already booming, driven mainly by Ukrainians escaping the war. Every new rental advert means for agents their phones ringing off the hook and rents are at record rates. Tenants, whose rental contracts are expiring, are more likely to extend their contracts and agree to pay more, because they are not able to find cheaper, if anything.  Currently our team successfully negotiates rent increases of 300 – 1000 PLN per month.

This exceptionally good situation on the rental market creates great opportunities for investors of apartments for rent. If you do not know how to take advantage of it, how to safely rent at the highest possible price, how to increase the rent in accordance with the law, we will be happy to help. Our knowledge and experience have a direct impact on the quality of our property management and acting in the best interest of the client is the basis of our business.