Rents continued to rise in May, increasing by 1.8% nationally and by 0.6% in the capital over the month. In Budapest, growth was more moderate, as rents fell in the inner and outer districts of Pest. Compared to the previous month, consumer prices eased, so that real rents rose significantly nationally and slightly in Budapest compared to April.

Rents have been rising steadily since the beginning of the year

After slowing down at the end of 2022, this year has seen a faster pace of rent growth in the residential rental market. In May 2023, compared to the previous month, asking rents increased by 1.8% nationally and by 0.6% in Budapest. May rents were 16% higher nationally, 17% higher in Budapest than in the same period last year, and 85% and 76% higher respectively than in 2015.

Nominal rents have been above the January 2020 peak for more than a year, exceeding it by 27% nationally and 23% in Budapest in May 2023. However, taking the consumer price index into account, real rents were 11% and 13% lower respectively than before the epidemic. The decline in consumer prices compared to the previous month led to a significant increase in real rents nationally, but a slight increase in the capital.

On the Pest side of the capital, rents fell in the inner and outer districts (by 1.0% and 0.6% respectively) and rose in the transitional districts (by 1.3%) over the month. On the Buda side, asking rents increased by 2.7% in the hilly districts and by 1.0% in the other districts, following a significant fall in the previous month. Over the course of a year, the latter group of districts saw the highest increase (17.1%) and the outer districts of Pest the lowest (14.7%).

Supply remains more moderate than a year ago

In the first five months of 2023, 57% of the advertisements considered were for housing in the capital, 28% in a city with county rights and 14% in a city without county rights. The average floor area of the dwellings advertised for rent was 55 m2 in Budapest and 58 m² in the cities with county rights. In the smaller municipalities - the non-county towns and villages - the dwellings for rent tended to be larger, with an average floor area of 66 m². The rental dwellings 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 dwellings in multi-dwelling buildings, with the remaining 8% or so for detached houses. In Budapest, on the other hand, only 3.9% of dwellings for rent were detached houses. In January-May 2023, 41% of advertisements in the capital and 43% nationally came from private individuals.

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