The rental market, both short-term and long-term, has changed rapidly over the last year. While long-term leases went down by more than 10%, short-term leases fell sharply. Homeowners are finding that long-term rentals save them time and effort compared to short-term rentals. The supply of apartments for rent is gradually declining this year, because it is rented again in a larger one.
While property prices for sale are rising, rental prices have fallen during the pandemic. This was influenced by several factors - many people worked and studied from home and therefore did not need to physically stay in Bratislava. While in the first half of 2020 the average price of rent without energy in the Herrys agency was more than 700 euros per month, in the same period of that year the price fell to 603 euros.
The pandemic froze tourism, which also includes apartments for short-term rent. Since the beginning of the pandemic, real estate agencies have recorded an increased interest of owners in long-term rental of these flats, which represents a more stable income for them.
The flats were mostly rented by the owners for a definite period, for a maximum of one year, with the vision of returning to a short-term rental for tourists. However, the situation has not yet allowed this, so these leases continue for the second year. "We are registering a group of landlords who are still trying to rent their apartments through platforms such as Airbnb, but most admit that they cannot climb to the previous level of rental income," says Martin Marsina from the real estate agency Herrys. At the same time, he adds that the market assumption that the owners should have sold these flats in bulk has not been fulfilled and that the owners of these flats have kept them for the time being. "We had several such flats on offer, but it was really only a small percentage of the owners compared to those who decided to keep the flats."
Apartments intended for short-term rent affect the prices of long-term rentals in Bratislava
The mere fact that several hundred Airbnb apartments have entered the long-term rental market, which has increased the supply of long-term rental properties, testifies to this effect. However, the number of these flats was not as significant as, for example. in Prague, where several thousand of them came to the long-term housing market, and in central locations prices were corrected by as much as 30%. The migration of employees of large companies and students, whether Slovak or foreign, was also a fundamental factor in the decline in rental prices in Bratislava. With a longer-lasting lockdown, whether in spring 2020 or through winter 2020/2021, we observed declining demand and, conversely, a growing supply of unoccupied flats.
"Currently, the market is stabilizing and the supply of rental apartments is declining, with more and more apartments finding new tenants. For comparison, while in the first half of 2020 the real estate agency Herrys managed to close 162 leases, in June 2021 it was already 221 leased units, which represents a year-on-year increase of more than 36% over the comparable period, "says Martin Marsina.
Rent an apartment for a short or long term?
It is not possible to say unequivocally whether it is more advantageous for the owner to put the property in a short-term or long-term lease - both forms bring certain benefits. It depends on several factors, with the location in which the property is located being the most important. Short-term rentals work best in locations that are attractive to tourists, where you can use the aforementioned Airbnb or Booking.com platform.
"One of the biggest disadvantages was considered by clients who used to rent flats for a short time and currently have a long-term lease on them through us, a high time commitment and the effort they had to expend. Another thing is that such properties wear out much faster due to the increased turnover of people who use the property, "explained Martin Marsina. "Earnings from renting through Airbnb and similar platforms could be interesting if the owner invested time and energy into it. Our office rather works with owners who do not want to spend a lot of time solving the lease, so they turn to us and entrust the property to us in the so-called Rent management. "
Purchase of investment apartments with the intention of renting in the current situation
The combination of favorable interest rates, the shortage of flats on the Bratislava residential market, rising prices for building materials, all these factors lead to the assumption that real estate prices will continue to rise and investing in housing will still pay off. And clients still consider such an investment to be a sensible investment. It is up to the owner himself to dispose of the property, whether he leases it in the long term, in the short term, or even leaves it uninhabited for a certain period. "Buy an apartment as an investment, respectively. how to increase savings is definitely a sensible decision. Its subsequent use depends on the current situation. Our clients increasingly perceive the purchase of real estate as a protection of their resources from possible inflation and also rely on the growth of their value over time. We do not currently register buyers with the intention of using the apartment in the form of a short-term lease almost at all, "added Martin Marsina.
