Rental market: wage increase in Hungary drives up prices

Prices at the Hungarian rental market increased in February. The price increase in Budapest is more pronounced compared to the countryside.

Prices continued their upward trend in February in the Hungarian rental market compared to January. According to the Central Statistical Office’s (KSH) and ingatlan.com’s joint report, rising wages affected the rental market.

In February, rental prices increased in Budapest by 1.4 percent, and by 1.8 percent in the countryside. László Balogh, ingatlan.com’s chief economist says the trend is not surprising as the latest wage increase has begun to affect the market.

“As expected, rising wages have appeared in the rental market, with the minimum wage and the guaranteed minimum wage both rising significantly from January, pulling average salaries higher,” Balogh wrote.

“People received their increased payments in February, which the landlords who rented out their flats had also counted on,” Balogh explained the underlying cause for the upward trend. The expert went on to say that rents might rise further this year, but at a slower rate than inflation.

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However, the monthly average rent rises over the year still account for a 19.8 percent increase in the national average rent rates. This number is even larger in the Hungarian capital: Budapest saw a 21.5 percent increase in rents so far in 2023.