The increase in rents accelerated in June: they became 2.1% higher nationally and 2.5% higher in Budapest in a month. Supply rents rose in all district groups in the capital city, but the pace of growth was lower than a year earlier. The monthly inflation rate lagged behind the growth rate of nominal rents in June, with real wages rising by 1.8% nationally and by 2.3% in Budapest compared to the previous month. In the first half of 2023, apartments were offered for rent at the highest prices in Pest county and at the lowest prices in Northern Hungary.

Rents rose at an accelerating pace in June

After a slowdown at the end of 2022, the first half of 2023 saw a faster pace of price increases in the rental market. In June 2023, supply rents increased by 2.1% nationally and by 2.5% in Budapest, compared to the previous month. Compared to the same period last year, rents in June were 14% higher nationally and 15% higher in Budapest. Rental prices exceeded the 2015 base period level by 88% and 81%, respectively.

The level of nominal rents was rising above the peak of January 2020 for about a year and a half, exceeding it by 29% nationally and 26% in Budapest in June 2023. Nevertheless, taking the consumer price index into consideration, real rents were 9.1% and 11% lower than the pre-pandemic level. The monthly rate of inflation lagged behind the growth rate of nominal rents in June, with real wages rising by 1.8% nationally and 2.3% in Budapest compared to the previous month.

In the capital, rents rose by 3.7% in the inner districts of the Pest side, 1.8% in the transitional districts and 2.6% in the outer districts compared to May 2023. On the Buda side, supply rents rose by 2.3% in the hilly districts and by 2.2% in the other districts. In one year, the highest increase was in the inner districts of Pest (16.1%) and the lowest in the hilly districts of Buda (12.3%). Compared to the same period of the previous year, rent growth has showed a tendency to slow down in practically all groups of districts since December 2022.

The amount of average monthly rents increased most in Pest county in a year

During the first half of 2023, 56% of the advertisements considered were for housing in the capital, 28% in county towns and 14% in non-county towns. The average floor area of dwellings advertised for rent was 55 m² in Budapest and 58 m² in county towns. In the smaller municipalities – non-county towns and villages – dwellings for rent tended to be larger, with an average floor area of 66 m². Rentals with the largest floor area (77 m² on average) continued to be advertised in Pest county.

In the first half of 2023, apartments were offered for rent at the highest prices in Pest county (an average of HUF 231 thousand per month), while in Northern Hungary they were offered at the lowest prices (HUF 119 thousand per month). In Budapest, the average monthly supply rents were HUF 221 thousand in the first half of 2023. Compared to the same period last year, The average monthly rent increased the most in Pest county (25%) and the least in Northern Hungary (12%) compared to the same period of the previous year.

At the national level, the vast majority (92%) of the advertisements observed were for flats in multi-family buildings, with the remaining 8% being for detached houses. However, only 3.9% of dwellings for rent were family houses in Budapest. In the first half of 2023, 41% of the advertisements in the capital and 42% nationally were from private individuals.

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