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Apartment rental still profitable

09 August 2017

EUROPE Poland is one of the countries with the highest rates of return for apartment rental, according to the ‘Property Index: Overview of European Residential Markets’ report which covers eighteen EU countries and Israel.

Germany has the highest proportion of rental apartments compared to overall stock at 54.3 pct while Slovenia and Hungary have the least at 2.4 and 3.9 pct respectively. In Poland the figure comes to 15.3 pct. According to Deloitte the highest annual yields from rental apartments are in Odense in Denmark and Budapest in Hungary with 8.9 pct and 7.9 pct respectively. In Poland yields came to 6 pct in Warsaw, 6.6 pct in Kraków, 7.2 pct in Łódź and 7.4 pct in Wrocław. The lowest was central London with 2 pct. The most expensive properties were in London (EUR 16,500 per sqm) and central Paris (EUR 12,400 per sqm) with Tel Aviv coming third (EUR 8,200 per sqm). The cheapest apartments were in Debrecen (EUR 883 per sqm) and Győr (EUR 947) in Hungary. The cheapest capital city in the CEE is Budapest (app. EUR 1,500 per sqm), followed by Warsaw (just over EUR 1,700 per sqm) and Vilnius (nearly EUR 1,800 per sqm). In Prague the cost increases to EUR 2,400 per sqm. Warsaw apartments are priced at 143 pct of the country average. In Poland the average price per sqm came to EUR 1,212 9.7 pct up y-o-y. The highest y-o-y rises were were seen in Slovenia (26.6 pct), Denmark (10.8 pct), and Hungary (9.7 pct), while the highest losses were seen in the UK (9 pct), which were largely due to the depreciation of the pound. In 2016 the average supply across the EU came to 486.6 apartments per 1,000 residents. Israel had the smallest supply with 295 apartments per 1,000 residents followed by Poland with 372. The average number of newly-completed apartments per one thousand residents across the EU comes to 2.8, which is similar to the figure in 2015. In this respect Poland with a figure of 4.3 apartments per thousand is above the EU average which means that 163,400 new apartments were completed last year. Across the EU there is an average of 3.7 apartments under construction for every 1,000 residents with the figure for Poland being 4.5 (which compares to 4.4 a year earlier). Austria comes first in this category with an average of 7.6 apartments and Portugal comes bottom with 1.1. The report estimates that in Poland the average worker must save for eight years to be able to afford an apartment. In Holland the average is just four years and four months. In the Czech Republic the average time spent saving comes to almost eleven years. Slovenia has the lowest ratio of mortgage debt to GDP at 23.8 pct. Poland, the Czech Republic and Hungary also had mortgage debt ratios of less than 50 pct. The ratio in Poland is 34.6 pct. The highest mortgage debt ratios (over 200 pct) are in Holland and Denmark. In 2016 The Czech Republic had the lowest interest rates on mortgage debt (1.77 pct), while Hungary had the highest at 6.5 pct. In Poland the figure comes to 4.6 pct.

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