Cushman & Wakefield has analysed the findings of a survey carried out on a representative sample of the inhabitants of the largest Polish cities regarding their preferences when renting a home.
The survey was carried out using the CAWI method (Computer-Assisted Web Interview) on the users of the online SW Panel between 19-24 March 2021 and 9-20 April 2021. The sample included 3,078 Polish citizens aged 18+ in six cities (Warsaw, Krakow, Poznań, Łódź, Tricity, and Wrocław). In-depth questions were asked to 1,031 respondents who were renting and/or planning to rent a home; the demographic profile of the sample was in line with that of renters in the largest Polish cities.
The survey commissioned by Cushman & Wakefield has clearly revealed that the home rental market is far larger and more active than official figures suggest. The survey carried out on a representative sample of the inhabitants of Poland’s six largest cities shows that 18% of the respondents are renting a flat or a house (567 out of 3,078).
The residential market is red hot and homes on the new-build market are selling out almost as soon as a building permit is secured, with prices rising by the quarter. Buyer activity is gathering pace, driven by low interest rates and cheap lending. Spiralling prices are, however, benefiting the home rental market, which has become tenant-friendly on account of the pandemic. Rents have fallen almost across the board and there are real bargains to be found in adverts. Poland continues to lag behind its western neighbours, but the number of home renters has been rising by the year and looks set to grow.
Who are the tenants in Poland?
The survey of a representative sample of the inhabitants of Poland’s six largest cities shows that 18% of the respondents are renting a flat or a house (567 out of 3,078).
Homes in Poland are rented largely by young adults and young professionals (over 56% of current tenants and 49% of potential future tenants are under 34 years old).
Childless couples account for 37% of the renting respondents, followed by couples with children and singles at 21% each. Renters with flatmates make up 13%, with the remaining 8% being single parents with one child or more.
What flats are tenants looking for?
Two bedroom flats built to a higher standard and with a balcony, a terrace, a garden or nearby green areas are a clear leader – they are favoured by more than half of the 1,031 respondents who were renting and/or planning to rent a home.
Over 56% of the respondents from this group currently live in such units and a vast majority find them to be the right size. 36% think the properties they are renting are too small. Only a handful of the respondents have admitted that they could live in a flat that is too big. Looking for another property to rent, respondents will largely be searching for two or three bedroom flats: 42% vs 38%. Only 6% would like to live in studio flats.
Most renters of studio flats are under 34 years old. Respondents from this age group are also largely renting three and four bedroom flats or bigger, which may be indicative of co-living.
The standard of sought-after accommodation
More than 80% of tenants would like to move into a fully or partially furnished home, preferably with a separate kitchen (50% of the respondents). Close to 30% of the respondents wanting to rent a flat value flexibility and mobility, and therefore would appreciate not having to buy their own furniture.
Interestingly enough, tenants especially value flats with separate kitchens. The housing market has for years been inundated by newly-built homes with kitchenettes. 48% of the respondents would prefer a separate kitchen compared to just a quarter strongly favouring open plan living.
What else is important to residential tenants?
Needless to say, the amount of rent to pay is key to a vast majority (91%) of the respondents when it comes to choosing a flat. Other deciding factors included the standard of accommodation (87%), having a balcony or a recessed balcony (77%) and a large terrace or garden (52%).
Easy access to public transport and proximity to a workplace or school are very important to 85% and 74% of the respondents, respectively. A flat in or close to the centre of a city is sought after by half of the respondents. Regarding the neighbourhood, proximity to stores and restaurants is important to 82% of the respondents while 78% cite closeness to parks, forests and other green areas as relevant.
Meanwhile, it is important to only 36% of the respondents to have a playground nearby, and to 42% to have schools, kindergartens and crèches in the neighbourhood, which is directly connected with the profile of potential tenants as families with children constitute a small minority.
Close to 30% of the respondents value renting for its flexibility and being able to move quickly. The convenience of not having to think about repairs and other issues of home ownership is important to 26%. Work is an equally important factor. Nearly 28% of the respondents intending to rent a flat do not know where they will be working in a few years’ time, and 10% have jobs that require them to relocate frequently.
The price is, however, the key driver for tenants. Over 42% of the respondents in Cushman & Wakefield’s survey believe that home prices are too high and therefore they tend to favour renting over buying a home. Additionally, 11% of all the respondents (and as many as 41% of those intending to rent a flat over the year ahead) lack creditworthiness.
More than 29% of those planning to rent a flat over the coming year would prefer not to make long-term commitments to home ownership.
It is particularly notable that a landlord’s permission to keep a pet is very important to more than 60% of the respondents. The pandemic has seen a heightened interest in adopting and buying pets, which pushed their prices up by close to 30% year-on-year. Allowing pets at a property is, therefore, likely to be a key argument in favour of choosing the home of a pet-friendly landlord.
What has the pandemic changed?
The rental market is undergoing a revolution. During the first lockdown in March 2020, hundreds of apartments previously used as short-lets came onto the market, which led to increased competition and drove average rents down. A large proportion of such apartments feature a high hotel-like standard.
In addition, there is a growing supply of rental apartments marketed by institutional investors in the Private Rental Sector (PRS). This sector continues to grow across Poland. Such units boast a high fit-out standard and most are leased at market rental levels. Consequently, rental apartments with an outdated fit-out are falling out of favour.
Almost half of the respondents renting a flat say their housing needs have changed due to the pandemic.
The respondents were asked to tick up to three items that topped their list of priorities during the pandemic. Having a terrace, a garden or a balcony and proximity to parks, forests and other green areas were cited by tenants as the two must-haves. Factors important to 30% of the respondents included fibre optic internet connectivity, a larger dwelling size and an additional workroom or study – all due to remote schooling and working. Amid a tough labour market and liquidity issues in many sectors, it has become important to tenants to be able to renegotiate rental rates and payment dates whilst securing a flexible lease and a right to terminate it.
Relatively few respondents (18%) would consider renting cheaper homes in non-central locations and 10% would think about an out-of-town house.
The pandemic and the need to spend most of the time at home have accentuated the importance of the standard of accommodation - in addition to its size. However, access to a gym or a swimming pool in a building was not a priority for tenants. Air-conditioning has become particularly important during the pandemic to just under 10% of the respondents.
How much do tenants want to spend on renting?
80% of all renters and those looking for a flat to rent would like total rental costs, excluding service and utility charges, to stay under PLN 2,000 per month. More than half can afford to spend up to PLN 1,500 per month.
The analysis of disposable income shows that respondents with net incomes of up to PLN 3,000 and between PLN 3,000-5,000 account for the highest percentage of current and potential home renters.
What types of lease agreements do tenants want to sign? Who would they prefer to rent from?
What types of lease agreements are most sought after by tenants? Indefinite-term contracts with a one-month notice period are favoured by close to half of the respondents. Lease lengths are irrelevant to 14% of tenants.
The private rented sector continues to grow apace. Given the build-to-rent development pipeline, this sector is expected to attract growing numbers of renters in the coming years. At present, more than half of the respondents strongly prefer to rent from a private landlord rather than an institutional operator. So, there is still some work to be done here.