The end of the housing crisis in Hungary is far
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Is there an end in sight to the housing crisis in Hungary? Average renting costs are about EUR 480 a month. According to available data, about two million people live in housing poverty in the country. Loans are unaffordable for most citizens, but so is renting. The state has been supporting the idea of a renewed rental apartment programme, but how will it work?
Rental housing might be a solution to the problem. This seems to be a viable alternative to many investors. However, to have a true effect on the market, many rental housing compartments must be built, at least 10,000 new homes. Rental housing becomes increasingly popular as mortgages become unaffordable. In the case of rental housing, the rent prices are usually fixed. If there are enough rental housing compartments in the market, then it will decrease the price of housing in general.
Current problems
Currently, the profit on renting out an apartment is about 4 percent. This is not enough to get the interest of investors. Ákos Balla, founder of Balla Ingatlan told Index.hu the current situation in the market will not incentivise investment in rental housing from the private sector. Therefore, the state has to make steps to alleviate the situation and start the stabilisation of the market. This will not be a profitable venture for the state — says the expert. In this case, the state has to prioritise social welfare above profits.
