PSN preparing entire projects reserved for rental housing
RENTAL HOUSING IS Rising, PSN THAT IS PREPARING LARGE PROJECTS IN PRAGUE
In the Czech Republic, most households want to live in their own property. But lately, due to high apartment and house prices, lower mortgage availability, extreme inflation, as well as higher prices of building materials and labor, people are looking more for rental housing. The influx of refugees from Ukraine has significantly increased interest in rentals. Hundreds of people are currently applying for the best offers. At the moment, under the influence of enormous demand, rental prices are beginning to reach the level before the covid, they have already exceeded it somewhere. And the availability of apartments is declining, according to an expert from PSN. It has individual properties for rent in its portfolio, but it is also preparing entire projects reserved for rental housing.
The demand for rent has been rising significantly recently and is now extremely high due to the war in Ukraine. "Currently, we do not have a vacant apartment for rent, and if it happens to be vacated, it will be rented immediately. If I compare it with the previous period, in the past the apartment lasted a month, now it is a maximum of a week, but rather only a few days," says Helena Hyánková, deputy director of commercial projects at PSN. According to published data in 2021, a total of up to 15,000 units were available, now there are less than 5,000.
The interest is above standard, but the apartments are not.
At present, there is a complete shortage of apartments for rent in Prague (analyzes show the smallest offer in the last 7 years), especially those in the lower price category. "In addition, we expect demand to continue to grow. For many people, housing will become the only possible solution if mortgage terms do not change. This, of course, is reflected in the increase in the price of apartments. During the pandemic, some rental prices fell by as much as 30-40%, especially the more expensive ones. The cheaper ones were a decrease of about 10%. At present, prices are returning to the original level two years ago, they have already exceeded it somewhere," says Helena Hyánková. Available statistics show that the average rental price per 1 sqm / month in Prague is about 370 CZK and in year-on-year comparison In addition to Jihlava and Ústí nad Labem, rents are also increasing in other regional cities, such as Pardubice by 25%, Brno by almost 18% and Hradec Králové by more than 12%.
In Prague, people are interested in apartments with good public transport connections, the location often does not matter so much. In terms of size, small units are best and fastest to rent, but there is also demand for large luxury properties with a terrace and more bedrooms. Currently, the most common clients are mainly the young and middle generation, older people are almost non-existent. "Singles and couples predominate, sometimes there are families with children, but it is mainly foreign clients. In terms of interior equipment, everyone interested in something different. In general, however, they prefer that the apartment be furnished with, for example, built-in wardrobes, lights, etc.," describes the deputy director of commercial projects at PSN.
PSN will strengthen the rental housing segment.
Even with regard to the current market mood, PSN is preparing several projects for rental housing. These are currently in the preparation phase and the developer is working to obtain all permits so that they can begin their implementation. These include the renovation of the former Municipal Telephone Exchange in Fibichova Street with about 120 apartments or the reconstruction of three apartment buildings in Seifertova Street. The company is also intensively preparing projects in Polská or Muchova streets. "Of course, we then take care of all our buildings in which we rent space. The scope of the service always depends on the degree of luxury of the individual properties," says Helena Hyánková.
In the lease segment, PSN entered into a total of 113 new leases in 2021, and 151 extended them. "Last year it was more of a decline compared to previous years. So far, this year is definitely developing better, so we believe that we will return to the numbers before the covid. At the moment, the ratio of our portfolio is approximately 80% sales and 20% leases. In the future, however, this percentage will certainly change and the share of rents will strengthen. Above all, we will focus on the preparation and finalization of existing projects, as well as on the purchase of interesting real estate and land that could appear on the market at this time. Thanks to the sufficient capital, we are able to buy such quickly and subsequently turn it into, for example, a project with rental housing," concludes Helena Hyánková from PSN.
