What’s next?! Further price increase to come in Budapest’s rental market!
Record-high rental prices in Budapest will continue to rise this summer. In the upcoming months, tenants will have to dig deep into their wallet if they want to rent an apartment in the Hungarian capital. Here are the details!
According to experts, the arrival of Ukrainian refugees settling down in Hungary has almost completely wiped out supply in Budapest’s real estate market. Accordingly, in May, 35% price increase was experienced in the Hungarian capital. And the rise is still not over. Further price increase is expected due to the higher education threshold scores to be announced on 21st July. Therefore, in the upcoming summer months, tens of thousands of students will be trying to find housing as soon as possible.
According to real estate market experts, landlords are consciously preparing for this period and calculating the prices for the current academic year in advance. If it turns out during the season that demand is higher than supply, owners of unlet flats or flats that become vacant in mid-August still have the opportunity to adjust prices. The real prices will emerge in mid-September, as the market evens out.
Supply price increases can vary significantly from one location to another. One thing is for sure: landlords will raise prices this season if possible.
Experts predict a further 30% price increase in the Budapest real estate market, the effects of which are already being felt.
Therefore, if you are planning to rent an apartment, it is highly recommended to hurry up. Besides rent increases, an increase in overheads is also expected, especially if the property is owned by a company. In addition to the above, a further reduction in supply is also expected in the summer months due to short-term housing rents. With the lifting of restrictions, Budapest’s tourism is booming again. Therefore, several owners may decide to rent out their property to tourists on a short-term basis.
While during the pandemic, tenants had a wide choice in the supply, by now, the situation has changed significantly. As the rental market continues to become more expensive and the supply is continuously decreasing, many Hungarian tenants are choosing to accept a rent increase rather than start looking for a new apartment.
But it is still not too late. According to experts, July is expected to be a very short period when old leases expire and vacant apartments can be expected to return to the market. If you keep a sharp eye and react quickly, you can get lucky and find yourself a good rental during this period.
University students in the rental market
Students from rural, lower-middle-income regions are primarily targeting university dormitories. If they do not get here, they will most likely choose between apartments with poorer parameters that are difficult to rent out, or are left with the alternative of moving in together. In such cases, up to 6-8 students can move in together in order to minimise housing costs.
In the case of foreign students, the situation is different:
they are willing to pay up to 10% more for renting a flat in the city centre, close to the university – and in euros if necessary.
The big question is how house prices will increase until September. The arrival of foreign students and expats working in Hungary at the end of August or mid-September are expected to see a return to the euro rent, which is clearly bad news for Hungarian tenants – as reported by the Hungarian news portal Pénzcentrum.
Investing in real estates
With inflation rising steadily, many people are looking to move their savings into property. According to real estate experts, there are two important factors to be considered. The property prices and rents have risen most in typically cheaper districts. Additionally, the mobility of property seekers is increasing. Therefore, it may be even more advantageous to buy property as an investment in a more peripheral district, considering the purchase price, but the price advantage is steadily declining. However, properties close to higher education institutions – having a well-developed infrastructure and transport – can still be good investment targets with a price advantage in the long term.
Real estate market in the countryside
Similarly to Budapest, there has been a steady rise in prices in major Hungarian cities across the country.
One of the best examples is Kecskemét, where, despite an 18-19% increase in prices, the demand for apartments and houses for rent has not decreased. According to the expert, rising bank interest rates mean that fewer people are choosing to buy, opting instead for renting. Experience shows that the majority of owners can rent out their property within a short period of time. This is particularly true for apartments in good condition. At the moment, the demand side does not seem to be able to stop or at least moderate the significant increase in rental prices – as reported by Hiros.
Read alsoThese are the most popular Hungarian cities on the real estate market
Source: penzcentrum.hu, hiros.hu