Drastic change in Hungary’s rental market
Rental prices have been increasing in Hungary for 1.5 years just like property prices. We reported on Friday that the trend turned in the latter case thanks to the government’s summer decision concerning their utility price cap scheme. The result is that real estate price growth stopped and, in some cases, prices started to fall. And it seems that trend turn affects the Hungarian rental market.
Hungary’s heated rental market will cool down?
According to alon.hu, the surge of the rental prices ended in Hungary, even though that trend has ruled the market for 1.5 years. In September, rental prices grew only by 0.1 percent, while they decreased by that same rate in Budapest compared to August. That data comes from the newly published rental price index compiled by the Hungarian Central Statistical Office (KSH) and ingatlan.com.
In a yearly comparison, however, rental prices have become 22 percent higher in Hungary, while that rate was 24 percent in Budapest in September, KSH noted. Interestingly, nominal prices were above the pre-COVID peak of January 2020 from this March. However, the real price remained below that. Considering the consumer price index, the real rental prices were 7.9 percent lower in Hungary. In Budapest, that rate was even higher, at 11 percent.
In the first nine months of the year, 59 percent of the rental advertisements were from Budapest, 27 percent from the rural municipalities and 13 percent from other settlements. The number of advertisements grew significantly, so there is an increasing supply.
Read alsoTrend turn arrived: here is when property prices will start to fall in Hungary
Budapest is still the most expensive
László Balogh, a leading analyst of ingatlan.com, said they expected a change in the rental price rise would end this year. From July, the growth of the rental price index was dwindling, he added. There are multiple reasons behind that trend turn. One is the increasing costs of living and the changing utility price cap scheme of the government. The slowdown of the Hungarian real estate market was observable in the property market. The price rise ended in that segment from September, too.
Based on ingatlan.com, the average rental price in Budapest is HUF 200,000 (EUR 484) per month. It is the highest in the 5th district, where it reaches almost HUF 300 thousand (EUR 726) per month. The lowest rental prices are in the capital’s 23rd district (Soroksár), where the average cost of a flat is HUF 140 thousand (EUR 340). The cheapest municipality is Békéscsaba with only HUF 90 thousand (EUR 218), while the most expensive is the future BMW hub, Debrecen and Veszprém, the City of Queens with HUF 150,000 (EUR 363) per month.
Read alsoTenants face prohibitively expensive rental prices in Budapest
Source: alon.hu