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Has The PRS Found a Home in Central and Eastern Europe?

A new 29-page report by Colliers looks at the growing residential for rent sector in Central and Eastern Europe (CEE), which is defined as Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia.

Colliers says that because a great deal of time, thought and planning goes into building Build to Rent developments, this type of product is not yet that common in the CEE region, ‘but it is on the way’.

PRS Market Drivers – BTL investors
The report states: ‘In this low interest rate world that we have been living in for the past many years, there has also been a growing, fragmented rental market in many countries, as private individuals invest into residential (typically apartment units) for personal investment purposes. This is largely because savings sat in personal accounts are simply not providing any meaningful returns and the borrowing costs on a mortgage have been historically low in most markets, and fairly easy to obtain.

‘While some of these units might be for family members to live in, financed by the ‘Bank of Mum and Dad’, many are being rented out, both long and short term, all the while growing in value as sales prices or values per square metre continue to grow year on year. Coupled with the shortage or imbalance of new supply in many markets and the impact of this activity, it is also fuelling this momentum, and making the dream of owning a home for many, seemingly impossible. And it is partially for these reasons that the PRS sector and interest from investors, has also been rising.’

The research shows that CEE is still heavily tilted towards homeownership compared to more developed European countries. For example, the owner occupier/tenant split in Germany is almost equal at 51.1/48.9. Likewise, in Austria at 55.2/44.8. However, Poland (84.2/15.8) has three times fewer tenants than Germany, but still almost four times more than Romania (95.8/4.2), where only one person in every 25 lives in a rental home.

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