Unbelievable: rental prices sky-high in Budapest, here is why
Since many rental contracts include price increases at the beginning of the year, rents started to rise again. As inflation slows, landlords may feel they can raise rents more. This brings us to sky-high rental prices in Budapest, the Hungarian capital.
According to KSH-ingatlan.com’s rent index, the average rent prices in Hungary and Budapest decreased month-on-month in the last month of 2023. However, in the first two weeks of January, Budapest saw an increase in the supply market, ingatlan.com writes in a statement.
“In December last year, the year-on-year increase was 13% nationally and 12% in Budapest. Compared to average levels in 2015, there was a rise of 95 and 85%, respectively. At the same time, real rents, or inflation-adjusted rents, are still below the peak levels seen in January 2020,” said László Balogh, chief economist at ingatlan.com.
In the first three weeks of 2024, however, there was a shift in the rental market, and not just in prices. Renters can now choose from more than 14,000 ads nationwide, up 15 percent from a year ago. In Budapest, more than 1,000 apartments have been added to the supply, but rents have risen at the same time.
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Average monthly rents in the capital have risen to HUF 250,000 (EUR 650) from HUF 240,000 (EUR 623) in previous months.
“This is partly due to the fact that real wages have been on the rise, and further increases can be expected this year. And landlords are extremely sensitive to tenants’ ability to pay,” Mr Balogh said.
“Although the majority of rental contracts have an anniversary in the summer before the September academic year, a significant number have rent increases in January and in many cases linked to inflation. This could also pull up prices in the capital. However, most tenants cannot afford an increase equivalent to last year’s inflation of 17.6 percent, so a significant number of landlords will be happy with a smaller increase,” he added.