Gloomy trends: Property in Hungary became more expensive than anybody ever thought

Young people are increasingly being excluded from the property market as access to credit becomes tighter, according to data from the Hungarian Central Statistical Office (HSCO). As a result, they are being forced to enter the rental market rather than the sales market, which is driving up rents. For this reason, we made a snapshot of the rental market in Hungary and its neighbouring countries.

The HSCO’s data show that the young individuals’ (population under 36) share of total purchases was stagnating at 30% for years, but it has dropped by 27-28% in the last 2-1.5 years. This is due to the difficulty in obtaining home loans and the fact that this is the age group whose home purchase is most dependent on the availability and affordability of credit.

The entry of young people into the housing market is also becoming a persisting trend. Starting a family and completing university studies have also been increasingly postponed in recent decades, so when we talk about young people, we usually focus on those under 36 years of age on the housing market – Gáborné Székely, Head of the Department of HSCO told InfoRadio.

The housing market from the perspective of the young population

In large cities, the share of young people aged under 36 in the housing market is generally less than a quarter of all housing purchases, but in smaller municipalities, it is already around 29-30%, while in villages, it is even higher, at 34% in 2022.

The share of young people in the housing market was sitting at around 30% for years, but has stop to 27-28% in the last 1.5-2 years. The HSCO’s expert cited difficulties in the credit market as the main reason. “This is the age group for whom the purchase of a home depends most on the availability and affordability of credit,” elaborated Gáborné Székely on the issue.

In Budapest’s popular inner-city districts, the average monthly rent is HUF 147,000 (EUR) 390) , but for that price, just a small (30 sqm) studio is typically available. While for two-room apartments property-owners are asking EUR 580 or even more. In popular countryside university centres like Debrecen and Szeged, the same price for rent is between EUR 380-390 respectively.

A study has also been published on young people’s access to housing. Professional organisations are calling for an affordable rental housing programme to alleviate the housing crisis, according to Index. As it is understood, a governmental initiative is already in the making.