In March the increase in rents continued at a more moderate pace than in the previous two months: they became 0.8% higher nationally and 0.9% higher in Budapest in a month, rising in all district groups in the capital city. In annual terms, the growth rate of nominal rents continues to be lower than inflation; therefore, their real value was 5–6% below the year-earlier value. After a slight increase in February, real rents compared to the previous month stagnated in March.

Rents keep going up in March

After a slowdown at the end of 2022, the current year has brought a more rapid increase at the rental housing market. In March 2023 rent increase slightly slowed: offer rents rose by 0.8% nationally and by 0.9% in Budapest, compared to the previous month. Compared to the level measured in the same period of the previous year, rents were 18% higher nationally and 19% higher in Budapest. In March, rental prices exceeded the 2015 base period level by 80% and 72%, respectively.

The level of nominal rents had risen over the peak of January 2020 for more than a year; they exceeded it by 24% nationally and by 20% in Budapest in March 2023. Nevertheless, taking the consumer price index into consideration, real rents were 13% and 15% lower than the pre-pandemic level. Compared to the previous month, nominal prices broadly increased to an extent similar to consumer prices; therefore, real rents basically remained at the level of the previous month.

Rents went up in all district groups in Budapest in one month: by less than 1% in the inner and transitional districts of Pest and in the other districts of Buda, and by 1.5% both in the hilly districts of Buda and the outer districts of Pest. Rents increased to the largest extent in the inner districts of Pest (20%) and to the lowest extent in the other districts of Buda (16%) for a period of one year.

Rental housing supply is still below the year-earlier level

During the first three months of 2023, 56% of advertisements considered referred to apartments in Budapest, 28% to apartments in county towns and 14% to apartments in non-county towns. The average size of dwellings advertised for rent was 54 m² in Budapest and 57 m² in county towns. In the smaller municipalities – non-county towns and villages – dwellings for rent were generally larger, with an average floor area of 65 m². Rentals with the largest floor area (77 m² on average) continued to be advertised in Pest county.

At the national level, dwellings in multi-apartment buildings accounted for the vast majority of the observed advertisements (92%) and the remaining 8% for detached houses. In Budapest, however, only a total of 3.9% of advertisements referred to detached houses. In January-March 2023, 43% of the advertisements in the capital city and 44% in Hungary came from individuals.

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