Rents continued to rise in February, up by 1.8% nationally and 1.4% in the capital, with increases in all Budapest district groups. The year-on-year growth rate of nominal rents was still lower than inflation, causing their real value to fall by a few percent over a year. Compared to the previous month, however, rents rose faster than consumer prices, showing a slight increase in real terms compared to January.

Rents continued to rise in February

After a slowdown at the end of last year, this year has seen a faster pace of growth in the residential rental market. In February 2023, compared to the previous month, supply rents increased by 1.8% nationally and by 1.4% in Budapest.

Compared to the same period last year, rents in February were 20% higher nationally and 21% higher in Budapest, and 79% and 71% higher respectively compared to the base period in 2015.

The level of nominal rents has been above the peak in January 2020 for more than a year, exceeding it by 23% nationally and 19% in Budapest in February 2023. At the same time, taking the CPI into account, real rents were 13% and 15% lower than before the pandemic outbreak. The monthly rate of inflation in February lagged behind the rate of increase in nominal wages, so that real wages rose again slightly after 6 months of decline.

In the capital, rents rose in all district groups over the month, with the largest increase of 2.4% in the Buda hill districts and a 1-2% increase in the other district groups. Over a year, the highest increase was in the inner districts of Pest (24%) and the lowest in the outer districts of Pest (18%).

Capital's share of supply continued to fall

In the first two months of 2023, 56% of the advertisements considered were for housing in the capital, 28% in a town with county rights and 14% in a town without county rights.  

The average floor area of the dwellings advertised for rent in January-February was 55 m² in Budapest and 57 m² in the towns with county rights. In the smaller municipalities - the non-county towns and villages - the dwellings for rent are generally larger, with an average floor area of 66 m². The rentals with the largest floor area (77 m² on average) continued to be advertised in Pest county.

Nationally, the vast majority (92%) of the advertisements observed were for flats in multi-family buildings, with the remaining 8% or so for detached houses. In Budapest, however, only 3.9% of dwellings for rent were detached houses. In the capital, 43% of advertisements were from private individuals, compared with 45% nationally.

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