Jul 23, 2010

Residential Rents Starting to Rebound in CEE


After a difficult 2009, the residential real estate market in CEE is showing signs of stability. Rents are no longer dropping in most of our cities and some property shortages are developing. Most cities saw no reduction in the number of expatriates relocating to the region.


In our cities of interest (Moscow, Prague, Budapest, Warsaw and Bratislava), rents for residential properties are stabilizing after falling throughout 2009. Some cities experienced dramatic drops in residential rent while others only saw slight change. Now, rental prices in nearly every city are flattening. Rents in Moscow began to rise from May as the busy summer property-search season began.

In terms of demand, the number of foreign transfers and relocations into the region stayed steady. While the inflow of foreigners did not slow, we noticed the effects of the recession in other ways. First, rental budgets for transferring staff were lower. Second, transferees sought more short-term accommodation options. Third, companies relocated individuals and couples instead of managers with families. These transferees sought apartments instead of houses.

Improvements are starting to show and overall demand from foreign clients ticked up as their bottom lines improved. Individuals are getting more involved as well. Residential property investors are making decisions and taking action after awaiting a price-bottom.

Recently rented Bratislava apartment

It remains a buyer’s market, and some properties throughout the region stay on the market longer than they did before the real estate crisis. Still, well-priced, renovated homes are disappearing quickly. In Moscow, a handful of properties in certain neighborhoods remain on the market for as little as two to three weeks. Prioperty seekers in Central Europe are still finding real bargains, but are flexible and adaptable in their searches.

In conclusion, home rents and sale prices throughout this region are no longer falling. As prices flatten, renters and investors are acting faster and becoming more decisive throughout their property search.

5 comments:

  1. The drop was caused by lower income and many people couldn't affor renting the whole flat so they decided for flatsharing. I am wwriting from http://www.wspollokator.pl and can support my opinion by numbers which shows the increase of people who rent a room or share their flats with others as they cannot afford to pay the whole rent just by themeselves.

    Regards,
    M

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