The rental market in the era of a pandemic, who lost and who gained?
The rental market in the era of a pandemic. Who lost and who gained?
As a continuation of the cycle on the real estate market in the pandemic era, we present another expert analysis, this time on the rental market. How looked its image in last months? How does it look like now? What kind of prognosis can you look forward to? Comments Bartłomiej Annusewicz, CEO of Lions Estate.
The impact of the pandemic on individual segments of the rental market
The pandemic has had an exceptionally strong impact on the rental market- contrary to sales. The interest in buying is constantly increasing, which translates into higher prices. This is especially visible in the premium real estate market, which is confirmed not only by developers, but also by Lions Estate advisors. Speaking strictly about the rental market, the short-term rental market suffered the most, as it ceased to exist overnight, which was the result of the introduced restrictions. People stopped traveling (both for private and business purposes), and it was travel-related rentals that generated traffic in this segment.
Most of the short-term rental offers were either for sale or for long-term rental purposes. This is one of the reasons the latter segment is also going through a crisis. A lot of new offers appeared, while the demand was limited, which resulted in a significant drop in prices and difficulties in renting empty premises. The usual interest in long-term rentals has declined due to downtime in business and academia. A form of learning and remote work has emerged.
Spacious houses and apartments are still on top
The least affected by the pandemic was the rental segment, including large houses and apartments, especially those with direct access to green areas – their own terraces or gardens. Most of the houses in Warsaw’s Wilanów, Zawady, Sadyba or Konstancin-Jeziorna were quickly rented from the beginning of the pandemic. Unlike in previous years, when real estate in this area was the most popular among expats (foreign employees of multinational corporations), diplomats and their families, now these properties are also willingly rented by Poles – even those who have their own apartments in the city center. This was due to the epidemic – restrictions in movement and uncertainty about the future. Poles much more often than before the pandemic put on real estate with a garden / terrace. In this area, it is easy to hire pest control seattle to solve all kinds of pest issues almost immediately.
The premium real estate market – luxury villas, mansions and apartments – is also a rental market that hardly suffered the effects of the pandemic. We usually rented these properties to foreign corporate clients (expats or diplomats). This year there was a change – to a large extent they were wealthy Poles who, due to the pandemic, were looking for luxury properties with a terrace or a garden.
Real estate is a constantly safe capital investment
Crisis situations, especially the pandemic, showed that luxury properties are always worth investing. Regardless of various factors, they maintain their value or increase it, being a safe capital investment. The luxury real estate market in particular is immune to any turmoil. What is better to give up? The situation has exposed the disadvantages of the small apartment rental market and short-term rental market, which so far have broken records of popularity among investors and tenants. The number of offers on the market, low interest and a drop in prices show that such an investment may currently be subject to considerable risk. We advise people considering purchasing investment real estate not to purchase a few small apartments, instead of which it is worth investing in one – larger ones with a terrace or garden, necessarily in a good location, which makes them more attractive for potential tenants.
The rental market for larger apartments or houses and luxury real estate has the greatest development potential. With constantly rising prices, many people, due to a limited budget, will choose to rent instead of buying their own apartment.
Rental market – forecasts for the next months
We observe that companies and corporations have already adapted to the current situation and are starting to return to their traditional cycle of employee relocation and searching for real estate for them. There is hope that the rental market will start to return to normal in the spring. Spring is the time when many expats and diplomats come to Poland with their families. Currently, we receive more and more inquiries and orders to search for real estate for rent, which proves that this sector is slowly being thawed.
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