Soon after the coronavirus emerged in Hungary, the economic shock of the pandemic reached the Hungarian real estate market. Let us see what changes could be experienced in the first quarter of the year and what can be expected in the forthcoming period.
In April, the average rent of apartments in Budapest was EUR 419 (~HUF 148,000), showing 8% decrease compared to the previous month. This means a price reduction of EUR 57 (~HUF 20,000) compared to the peak in January when the average rental price was EUR 478 (~HUF 169,000).
As we previously reported, Hungarian real estate market turned upside down due to the pandemic; therefore, several owners expanded the supply with former Airbnb apartments, offering their renovated and fully furnished properties, typically in the downtown.
As a result of this phenomenon, the price/value ratio has become much more favourable for tenants, compared to the beginning of the year or last year.
As the Hungarian news portal hvg reports, the demand side of the market shows an even more interesting picture. According to the tenant database of Rentingo.com, tenants registered in April would pay an average rent of EUR 376 (~HUF 133,000). Until February, a continuous increase could be observed; however, after the crisis in March and April, solvent demand has dropped.
Last month, the gap between supply and demand narrowed significantly. While advertised rents surpassed solvent demand by 22% in January, the gap narrowed to 12% in April. This suggests that bargain has become commonplace. Still, landlords did not continue to reduce the deposit rate. In April, only 29% of owners were satisfied with the one-month deposit, while 70% of the advertisers require a two-month deposit.
In May, the declining tendency of rental prices may slow.
According to experts, by returning to normal life, a higher increase is experienced in demand; however, the supply side is continuously under pressure as more and more apartment owners add their properties to the growing supply, realising that only a negligible number of foreign tourists can be expected this year.