Hungarian rental market sees massive hike, wages barely keep pace
The Hungarian rental market has seen a dramatic surge, with December marking a turning point. National rents climbed 9.3% year-on-year, with Budapest seeing an even steeper rise of 9.6%. As wages struggle to keep pace, employers and employees alike are increasingly exploring new alternatives to battle the unfolding housing crisis.
Hungarian rental market faces major surge
As Pénzcentrum writes, the Hungarian rental market experienced a significant surge at the end of last year, with average rents rising by 1.3% nationally and 1% in Budapest compared to November. December marked a shift after months of minimal declines, with rents climbing 9.3% higher year-on-year nationwide and 9.6% in the capital, according to the KSH-ingatlan.com rent index. As of January, only three districts in Budapest offered average rents below HUF 200,000 (EUR 486), while prices in the most sought-after areas ranged from HUF 235,000 (EUR 571) to HUF 322,000 (EUR 783).
László Balogh, chief economist at ingatlan.com, noted that rental prices will likely continue their moderate rise in early 2025, closely tied to wage increases in the labour market. These developments may further incentivise employers and employees to explore subsidised housing options.
What about the countryside?
In the Hungarian rental market, January data shows that average rents in Budapest remain below HUF 200,000 (EUR 486) in only three districts: 15, 21, and 23, with typical rents at HUF 180,000 (EUR 437). More diverse districts such as 8, 11, 13, and 14 see higher rents ranging from HUF 235,000 (EUR 571) to HUF 260,000 (EUR 632), while District 5 tops the list at HUF 340,000 (EUR 826). Outside Budapest, Debrecen leads among county seats with average rents of HUF 230,000 (EUR 559), followed by Győr at HUF 200,000 (EUR 486) and Nyíregyháza at HUF 180,000 (EUR 437). University cities like Szeged and Pécs average HUF 160,000, with Miskolc being more affordable at HUF 120,000 (EUR 292).
Wages can barely keep up, seeking alternatives
The rising costs in the Hungarian rental market are prompting both workers and employers to consider housing subsidies as a practical solution, according to László Balogh. Employers can easily administer the maximum monthly housing subsidy of HUF 150,000 (EUR 365) without needing contracts with banks or landlords, relying only on a rental contract or loan agreement provided by the employee. The subsidy can be transferred directly to the employee’s bank account alongside their salary. This option also benefits employers by reducing the tax and contribution burden by nearly 25%, making it a cost-effective alternative for both parties.
Read also:
- New Hungarian real estate trend: Slowly shifting to euro pricing?
- Budapest’s housing crisis in focus: What about the worsening situation in Debrecen?
Featured image: depositphotos.com
The “housing subsidy” and the Politicians now shifting the issue to employers actually highlights the extent of the mess? Losing tax revenue in the process. Robbing Peter to pay Paul – but worse. A shell game, better comparison?
A housing subsidy sounds great on paper but in reality it’ll just be used as a tax efficient vehicle to pay people less in their salary. It’ll accomplish nothing at all as people’s wages won’t overall increase but tax revenue will decline. It’s a fig leaf to cover the underlying reasons for rampant increases in property values and rents.