Rental market: wage increase in Hungary drives up prices

Housing market Rent prices Budapest downtown

Photo: facebook.com/karacsonygergely

Prices at the Hungarian rental market increased in February. The price increase in Budapest is more pronounced compared to the countryside.

Prices continued their upward trend in February in the Hungarian rental market compared to January. According to the Central Statistical Office’s (KSH) and ingatlan.com’s joint report, rising wages affected the rental market.

In February, rental prices increased in Budapest by 1.4 percent, and by 1.8 percent in the countryside. László Balogh, ingatlan.com’s chief economist says the trend is not surprising as the latest wage increase has begun to affect the market.

“As expected, rising wages have appeared in the rental market, with the minimum wage and the guaranteed minimum wage both rising significantly from January, pulling average salaries higher,” Balogh wrote.

“People received their increased payments in February, which the landlords who rented out their flats had also counted on,” Balogh explained the underlying cause for the upward trend. The expert went on to say that rents might rise further this year, but at a slower rate than inflation.

Read also: This is how much an apartment costs on average in Budapest right now

However, the monthly average rent rises over the year still account for a 19.8 percent increase in the national average rent rates. This number is even larger in the Hungarian capital: Budapest saw a 21.5 percent increase in rents so far in 2023.

Still, Balogh writes that the situation is not that bad. “This is a significant increase, but if we consider inflation, the figures appear more favourable.” This can be attributed to the fact that in real value, national rents in February were 13 percent below the January 2020 peak, while those in Budapest were 15 percent below.

Budapest crosses HUF 200,000 mark

In Budapest, the average rent on the rental market has been HUF 200,000 (EUR 506) since last autumn according to ingatlan.com’s data. For March, the average has risen to HUF 210,000 (EUR 531).

The most expensive district in Budapest is District V, the downtown area of the capital with an average rental price of HUF 320,000 (EUR 810). In Districts XI and XIII, which have the highest supply, owners want to rent out their flats for HUF 210,000 (EUR 531) and HUF 220,000 (EUR 556), respectively.

Within the borders of Budapest, Districts XX and XXIII remain the cheapest, with an average of HUF 139,000 (EUR 352) and HUF 150,000 (EUR 380).