Can it go even further? Hungarian rental market to experience price explosion!
Partly due to the Russian-Ukrainian war and refugees settling in Hungary, partly due to the likely disappearance of Covid, and partly because of the economy’s recovery, rental prices are soaring.
Growing demand, increasing prices
What is certain is that the situation in the Russian-Ukrainian war has stimulated the demand for apartments in Hungary, as suddenly tens of thousands of people have started looking for apartments.
After a long decrease due to the Covid epidemic and a long period of stagnation, the rental market is now recovering. Prices have mainly followed only inflation over the last 2 years but are now clearly on the rise, writes hvg.hu.
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Foreigners have returned, recovery is expected in the Airbnb market, which may lead to a decrease in demand in the rental market
Experts say real estate players have tried to minimise the economic effects of the pandemic after the sharp fall in 2020. Then, in the fourth quarter of 2021, there was a slight recovery in the market, but that too meant only a 2-5 per cent price increase for better apartments. However, since January and February, foreigners have been slowly returning to the rental market, and there are already signs that Airbnbs may get back on their feet, with more and more bookings coming to these accommodations.
The Russian-Ukrainian war also has an effect
As many Ukrainian citizens are coming to Hungary, a new group has appeared on the rental market. “Most of them are appearing in the domestic real estate market as solvent, temporary renters. They typically plan for two to three months, and their primary goal is to go home when the war ends. If we look at the situation from a market perspective, this sudden market demand is triggered by the sudden rise in demand for rental properties.
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Rental prices
Currently, studio flats can be rented starting around EUR 300-350 a month, and the price of one-bedroom properties starts around EUR 400-450, writes pénzcentrum.hu.
Last year’s 7.5 per cent inflation also pushed up rent, not only in Budapest but also in other big cities: Debrecen’s city centre, for example, is at a similar price level to the capital’s current prices.
While sales prices have already exceeded them, rental prices will only now return to pre-pandemic 2019 price levels. It was much more expensive to get an apartment then than in 2020, last year or now. By the second half of this year, we expect to surpass this level by 10-15 per cent.
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Source: hvg.hu, pénzcentrum.hu