Lease by Choice Rather Than Ownership

Research shows that Polish residents are increasingly willing to rent apartments for extended periods, provided landlords offer high-quality housing and foster environments where social ties can flourish. When a mortgage doesn’t bring happiness, maybe modern renting is the answer.

While the dream of owning a home or an apartment with a garden remains strong, especially among families with children, many do not see a mortgage as a feasible option. Instead, they opt to save for their dream home, a process that can take several decades. Depending on the city, saving enough money could take from a dozen to as long as 26 years in Warsaw, assuming you save half of your net income every month.

Economics Comes First

Historically, taking out a mortgage loan to buy property was justified by a simple calculation: the mortgage payment was often lower than rent for a similarly sized property. However, this comparison is no longer straightforward with current prices, high entry costs, and increased monthly burdens. As of June this year, purchase prices in the primary market ranged from about PLN 6,668 per sqm in Sosnowiec to PLN 17,500 in Warsaw. Meanwhile, rental rates ranged from PLN 36 per sqm in Częstochowa to PLN 76 in Warsaw. Even with credit, buying property remains a significant challenge. According to BIK’s Housing Credit Demand Index data, the average mortgage loan amount applied for in June reached a record PLN 442,000, nearly 16 percent higher than in June 2023.

A New Alternative: PRS

As the apartment sales market becomes increasingly out of reach for middle-income earners and private rentals do not always meet quality expectations, the PRS (Private Rented Sector) market, which offers institutional rentals from professional companies, is gaining traction. This growing segment is particularly appealing to residents of major cities like Warsaw, Wroclaw, Krakow, and Gdansk, where despite high salaries and expectations, purchasing power often falls short of buying a home.

In Poland’s largest cities, PRS investors have already completed around 16,600 units, with more projects under construction and in planning stages—potentially adding 30,000 units in the coming years. The high quality of these apartments and their competitive locations, relative to what the average buyer’s budget can afford, mean renting is no longer just a backup plan. Increasingly, it’s seen as a long-term solution.

A survey conducted earlier this year by Resi4Rent, Poland’s largest subscription housing platform in the PRS market, found that nearly half of its current clients do not view renting as a temporary solution. They intend to continue renting for at least the next two years or more. Only about 7% of tenants consider renting for less than a year. A significant portion of tenants—around a third—are undecided, which is crucial for the future position of the rental market, including PRS, relative to the sales market.

“The first contracts are usually for about a year, but most of our tenants choose to extend them or move to another Resi4Rent location and continue renting with us,” says Alicja Kosciesza, Sales and Marketing Director at Resi4Rent. “Clients have various motivations—from postponing the decision to take out a mortgage to seeking independence and moving away from their parents, finding flexible accommodation during professional mobility, studies, relocation, or adapting to a new country, to wanting to live in attractive urban locations and enjoying additional services included in the subscription. There isn’t one single scenario, but it is always a conscious choice by the client. Most of our tenants believe the subscription housing model we offer is the best solution for their current living situation. This is the opinion of over 64% of respondents in our survey.”

A Shift in Generational Preferences

Interest in renting, particularly among those aged 25-34, aligns with generational shifts. Young people today do not feel the same pressure to own property as previous generations did. This shift is not only due to awareness of market barriers but also a broader understanding of diverse lifestyles and definitions of personal happiness. Today’s younger generation values experience over accumulating material possessions. They tend to prioritize professional development, personal growth, and finding their path in life over starting a family early.

In this context, people are less focused on ownership and more on finding housing that matches their current stage of life and priorities. When considering apartments, respondents highlighted the importance of functional interior layouts, high-speed internet, aesthetics, quality finishes, outdoor spaces like balconies or gardens, household appliances, energy-saving solutions, and facilities for children.

As younger generations experience higher-quality rental offerings, negative stereotypes about renting are gradually fading. According to the Resi4Rent survey, when asked about their past experiences with renting, most respondents described them as “mostly positive” (about 61 percent) or “only positive” (about 10 percent). Less than 1 percent reported only negative experiences.

The Importance of Social Ties

As Ewa Jarczewska-Gerc, a psychologist at SWPS University, notes in a commentary on the report “Young Adults: Happiness to Fix 2023,” owning a house or apartment is not necessary for happiness. What matters for young people is a housing situation that allows them to live as they wish, and gives them a sense of agency, independence, and the ability to actively shape their surroundings.

From a sociological perspective, the most important aspects are settling in, building and maintaining relationships, and living according to one’s values. The report “Happy Home 2024: Living on the Timeline” shows that people are willing to call a place home when it enables them to fulfil three key needs: spending time together, supporting each other, and maintaining family traditions.

A sense of belonging is a core value around which PRS investors are building their brands. At Resi4Rent, for example, residents can count on account managers and technical staff being available throughout the day five days a week. Additionally, companies that offer rental apartments provide apps that make it easy to manage contracts, control expenses, report defects remotely, and express opinions. This way, tenants can quickly influence the dynamics of their community and address important issues. Through a variety of inclusive events, residents can actively participate in the life of their local community.

“We help our clients settle into new places, and get to know the city, the neighborhood, and their neighbors. We create diverse and multicultural communities where everyone can feel at home,” adds Alicja Kosciesza. “Throughout the year, we organize activities where people can meet others with similar interests, spend time together, and do something good for others. These include sports or art activities, small concerts, neighbourhood tours, spring bicycle inspections, and participating in charity events together. The friendly, welcoming, and open atmosphere of our housing estates is key to the popularity of subscription housing and a modern way of life that combines convenience with a sense of community.”