October 5, 2022

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The owners are now facing big problems.  Tenants may struggle to pay rent on time.  What do I do? [9.09.2022]

The owners are now facing big problems. Tenants may struggle to pay rent on time. What do I do? [9.09.2022]

Inflation and real estate rental prices in many Polish cities continue to grow, and therefore the scenario of bankruptcy of some tenants becomes realistic. Many apartment owners approach the matter recklessly and take into account only current earnings: they do not examine a candidate for the tenant, although they are tied to a contract worth tens of thousands of zlotys over 12 months.

The current situation can be considered as a paradise for rental apartment owners who are free to increase the rent due to the number of buyers. However, it should be noted that high prices may exclude some potential tenants or lead to solvency problems after the conclusion of the contract. At the same time, in the event of long-term problems with the tenant, even a high deposit may be insufficient.

– The current market situation carries serious threats, especially with regard to the credibility and solvency of the tenants, regardless of whether they are Polish citizens with a long credit history and permanent employment, or refugees who have been in Poland for several months – says Peter Kolla, State Director Renden Polska.

In the real estate rental market in Polish cities, the situation has not been difficult for a long time. According to the Otodom website, there are approximately 38 percent of apartment rental ads. Less than in the same period of 2021. A noticeable decline in performances is observed in ód and Kraków, where their number is more than 70%. Less, in Warsaw, Wroclaw and Rzeszow, the number of advertisements is about 60 percent. Less, and in Gdansk – more than 53 percent.

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Where does the demand come from? Certainly, factors such as the influx of Ukrainian refugees, the return of employees to offices, as well as the decline in the creditworthiness of Poles, which on average today reaches 40%. Less than a year has passed, which means many of them have to give up buying their own apartment and feed the rental market.

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At the same time, given this small supply and high demand, as well as high inflation, we have seen rising rental costs since the beginning of the year. For example, in Gdansk and Gdynia, rates in May were as high as 28 percent. higher than in January. The price hike has also been observed in recent weeks. Average prices for apartments for rent in May this year. Compared to April of this year. – It increased in almost all cities (from 1.1% in Wroclaw to 7% in Gdansk and 8.5% in Rzeszow).