Today’s inflation is mainly viewed through the following inflation prism interest rate increases And the problems that may arise from this fact to borrowers.
Hence the most common conclusion about the expected housing market crash. However, we often forget the other side of the coin. People with savings now face a real challenge – how to protect money from losing its value. It has long been known that one of the best ways to protect your capital is to invest in real estate. In the long run, real estate prices rise in line with inflation due, for example, to increases in the price of building materials and labor costs. From this point of view, the housing market can expect a stronger influx of investment capital. Especially that nowadays you can make a lot of money on Will rent an apartment. Rental market crackling at the seams! No one is renting an apartment for him! – This is how you can briefly summarize the headlines of press and web articles that have appeared for several months now. “In March 2022, the average rental prices for an apartment, according to Otodom data, amounted to 4,286 PLN in Warsaw, 2,641 PLN in Wroclaw, 2,643 PLN in Gdask, 2,429 PLN in Kraków, and PLN in 1987 in Pozna,” Remember Marta Posalska from the Otodom website to earn by renting an apartment?
We have checked the profitability of the cheapest and most expensive apartments in the five main housing markets in Poland. For this purpose, we used From apartment prices and bid rates Leasing Apartments from the Otodom website. We focused on the most sought-after apartment buildings, i.e. those that make up by far the largest portion of the available supply in the market. Of course I am talking about the so-called popular sector, that is, two- and three-room apartments. The lowest prices of these four walls were in the range of 143 thousand. PLN in Poznan reaches 249 thousand. PLN in Warsaw. On the other hand, the prices for the most expensive apartments with a definitely flat standard ranged from PLN 4.25 million in Pozna to PLN 19.02 million in Warsaw.
The rate of return is defined as the ratio of annual income from the lowest rental rate on the market for a full twelve months (assuming no vacancy) to the lowest price for the apartment. On the other hand, the second rate of return has been defined as the ratio of annual income from the highest market rent for a full twelve months to the highest price of the apartment. The results clearly show that in each of the five cities analyzed, it is cheap housing that allows you to earn more. The potential rate of return in their case ranges from 6.1 percent. in the capital to 11.7 per cent in Poznan. In contrast, in the case of more expensive apartments, the estimated rate of return is 2.2%. in Warsaw to 4.2 per cent in Gdansk. However, it should be noted that in the case of estimates, the devil is usually in the details. The cheapest buildings are those that are often in poor technical condition. In such a case, the cost of renewal should be added to the price. In addition, the price usually also results from the location and surroundings of the property. The worst location is not only a lower rental rate, but also potential problems in finding people willing to rent, which may translate into potential vacancies – sums up Marta Posalska.
Jaroslav Mikoaj Skocic
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