PwC: Poland’s PRS market grows by 32%, reaching 19,400 units in H1 2024

Poland’s Private Rented Sector (PRS) saw significant growth in the first half of 2024, with the number of completed units rising by 32% year-on-year to 19,400, according to a report by PwC Polska. Units under construction also increased by 10%, reaching 14,600. By 2028, the total number of completed PRS units could rise to nearly 80,000.

The report, titled “I am Institutional – A Favorable Environment for New Transactions,” highlights a slowdown in the housing market, with demand for home sales weakening. The end of the “2% Mortgage” program reduced financing options, leading to a 50% drop in sales in key cities like Warsaw and Krakow in Q2 2024 compared to Q3 2023. This slowdown is creating opportunities for PRS funds, which could become vital partners for developers.

“The slowdown in the home sale market may open doors for new PRS market transactions. Both sectors compete for land, and the decreased interest in home buying could fuel PRS growth,” said Kinga Barchoń, PwC Polska partner and real estate leader.

The first half of 2024 was active for new PRS projects, with over 3,000 new units starting construction. Three major investors—Resi4Rent, Vantage Rent, and PFRN—control over 50% of the market.

Despite its growth, the PRS market faces challenges, including inconsistent tax regulations and issues with VAT neutrality for business entities, which require careful planning to mitigate risks, according to PwC’s real estate tax expert, Marta Pabańska.

In Warsaw, PRS units increased by 931 to 8,400, with another 4,700 under construction. Resi4Rent and Heimstaden Bostad lead the market, while other key players like AFI Europe and NREP continue expanding their portfolios.

Wrocław saw a 38% increase in PRS units, now offering 3,300, while Kraków reached 3,000 units, with significant growth expected from Heimstaden Bostad and LEW Invest. Poznań and Tri-City also reported increases in PRS availability, though Łódź saw little change with limited new developments.

The report highlights that the PRS market remains divided among smaller developers but is poised for further growth in the coming years.

Source: PwC and ISBnews