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.