Lower return on investment in the rental market

A report released by Home Broker stated that investing in homes for rent is not profitable anymore. In five out of seven cities surveyed, the profitability of rentals has fallen. This includes Warsaw, Kraków, Gdańsk and Łódź. Warsaw is still the most profitable location and offers a 5 percent annual return on investment. On the other hand, the average price per meter in the capital is PLN 7 thousand which is the highest in the country, hence upfront investment costs need to be taken into account. In choice locations, the price per meter is in the PLN 8-9 thousand range. The lower profitability may result from the announcement of a new state-owned Bank Gospodarstwa Krajowego banking program that will allow the bank to purchase and rent apartments at preferential prices to needy citizens. The program will offer rents at a 20 percent discount compared to the going market price. The program should lower rents across the board.