Rental Prices in Budapest May Soon Cross an Unexpected Psychological Barrier
In just one month, rental prices in Budapest have risen by nearly 2 percent, despite a nationwide trend of slowing price increases.
March saw a further increase in rental prices, with a 0.8 percent rise nationally and 1.8 percent in Budapest compared to the previous month, according to the rental index by the Hungarian Central Statistical Office (KSH) and real estate website ingatlan.com.
Year-on-year data published on KSH’s website shows that rental prices have increased by 11.7 percent nationwide and by 12.4 percent in Budapest.
The report added that in the first three months of the year, 90 percent of the observed advertisements were for apartments in multi-apartment buildings, while the remaining approximately 10 percent advertised family houses. From January to March, 44 percent of the advertisements considered both in the capital and nationwide came from private individuals.
According to a Monday statement from ingatlan.com, quoting László Balogh, the site's leading economic expert: "The picture is mixed based on the latest data on the rental market."
"Nationally, the monthly rate of increase slowed from 1 percent in February to 0.8 percent, but in Budapest, the pace of monthly increase accelerated from 1.1 percent to 1.8 percent."
According to Balogh, the national slowdown in monthly rent increases can primarily be explained by the limits of demand affordability. Indeed, the increase in rental prices runs in parallel with wage increases.
The survey indicates that the average rental price for apartments in the capital is now 270,000 forints. Studio apartments smaller than 40 square meters are much cheaper, with an average rent of 185,000 forints.
"If the rate of wage increases does not slow down, then next year the average rental price level in Budapest could reach 300,000 forints," Balogh suggested.
He believes that rising rental prices could be partly offset by, for example, the Youth Guarantee Plus program initiated by the government in the spring, which provides social basis rental support aimed at assisting the employment of young people and job seekers.
THERE CONTINUE TO BE SIGNIFICANT REGIONAL DIFFERENCES
District V remains the most expensive, with rents costing 380,000 forints. Among the districts with the largest supply, Districts XI and XIII have average rents at the city average of 270,000 forints. The cheapest apartments are in Districts XVIII and XXI, where the cost remains below 200,000 forints.
Looking at county capitals, Debrecen is the most expensive, with an average rent of 220,000 forints in mid-April. It is followed by Győr, Székesfehérvár, and Veszprém, with rents between 176,000 and 180,000 forints. On the other end of the spectrum, Miskolc, Salgótarján, and Békéscsaba offer the cheapest rents, between 90,000 and 100,000 forints.