Students remain an important group of tenants for investors. We explore the prospects of renting apartments to young people.
Over the last several years, the significance of working immigrants as tenants of privately rented apartments has increased in the rental market. It’s hard to deny that the role of students in generating rental demand has decreased at the same time. This is primarily due to demographic factors. It’s worth remembering that during the academic year of 2010/2011, approximately 1.8 million people were studying at Polish universities. Ten years later, that number had dropped to around 1.2 million. Currently, the number of students still sits at about 1.2 million. At its peak (in 2006), nearly two million people were studying at Polish universities. It’s hard to imagine seeing those figures again in the near future. Therefore, it’s worth considering whether renting to students can still be a good solution from the perspective of the property owner. An interesting source of knowledge in this regard may be data from the recently published “Student Portfolio 2023” report.
Summary of the article:
- Since 2020, we have not seen significant decreases in the number of students in Poland. This is partly due to the influx of foreign students (about 105,000 in the academic year 2022/2023).
- It’s worth recalling that only about one third of students rent apartments on the open market. However, this is not a new situation.
- So far, the increase in rents has not significantly changed the preferences of native students. In most cases, renting to a student involves offering a single room.
The article prepared by the real estate agency, NieruchomosciSzybko.pl, also provides many other interesting insights about renting to students in Poland. This data may interest not only investors.
Foreign Students Compensate For Demographic Impact For Now
From the perspective of rental property owners, the good news is definitely that the nationwide number of students stopped declining after 2020. This stabilization is certainly partly due to the increase in the number of foreign students. The data from the Ministry of Education and Science indicate that around 105,000 people were studying at Polish universities in the academic year 2022/2023. This marked an increase of about 11% over the year. Unsurprisingly, the majority of foreign students are from Ukraine (about 48,000 people, an annual increase of nearly 10,000). It’s worth noting that as many as 90% of foreign students opt for full-time studies. “They are most commonly found in the largest Polish cities (Warsaw, Krakow, and Wroclaw),” explains Magdalena Markiewicz, expert of NieruchomosciSzybko.pl.
Renting to a Student: One in three Students Renting From The Market
If we want to assess the significance of student renting from the perspective of property owners, it’s important to remember that only one in three university students uses market rental offerings. This conclusion comes from a survey conducted by the Warsaw Institute of Banking in 2023. These results show that the largest group of students
(46%) live with a family or friends and therefore do not pay rent. “The share of students renting accommodation on market terms (29% in 2023) is currently much smaller,” informs Magdalena Markiewicz, expert of NieruchomosciSzybko.pl.
Interestingly, the same survey by the Warsaw Institute of Banking reveals that just 10% of native students live in dormitories due to the limited capacity of these student houses. Overall, it can be estimated that the group of students who rent apartments on the Polish market amount to approximately 350,000 – 400,000 people. For comparison, the total number of privately rented apartments in Poland is estimated to be between 1.2 million and 1.3 million. Apart from students, the largest groups of tenants are working immigrants and young workers who have already graduated. “When comparing the number of students as tenants and the supply of rental apartments, it’s crucial to remember that usually more than one person lives in one property,” stresses Magdalena Markiewicz, expert of NieruchomosciSzybko.pl.
Most Students Prefer A Single Room …
Not only students and property owners know that the last year has brought a drastic rent increase reaching about 20% in some cities. This situation certainly had a significant impact on student expenses – even more so as the cost of utilities, such as gas, electricity and water, as well as heating have risen sharply. Despite the strain on student budgets, the results of the “Financial Situation of Young Poles” survey conducted by the Warsaw Institute of Banking in 2023 indicate that as many as 61% of surveyed students rent a separate room. This figure has not changed from the previous year, and the percentage of students living with one other tenant has only increased symbolically (from 19% to 20%). The survey results suggest that in 2023, renting a whole property alone (usually a studio) was chosen by only 16% of respondents (unchanged from 2022). “The most common obstacle for many people is the cost of renting a studio apartment alone,” explains Magdalena Markiewicz, expert of NieruchomosciSzybko.pl.
The information presented above is certainly worth considering for investors who are interested in renting to students as a means of making a profit. Such investors often buy large apartments that can easily be split into smaller rooms. However, it’s important not to overdo it, as very small rooms are not popular. Moreover, examples of large apartments being divided into numerous small rooms can result in legal problems for investors. Specifically, the building inspectorate, informed perhaps by neighbors, may consider that there has been an unreported change in the use of the property (to collective housing). “A similar situation also applies to older single-family houses being transformed into small worker’s hostels for working immigrants,” summarizes Magdalena Markiewicz, expert of NieruchomosciSzybko.pl.
Source: Magdalena Markiewicz, expert of NieruchomosciSzybko.pl
