Meanwhile, rent levels in the Hungarian capital are expected to continue a steady rise for the rest of the year.Continue reading
The steep rise of rental prices in Budapest has further accelerated this year, Rentingo.com reports. Compared to the same period in 2021, the increase in June was more than 20 percent, with landlords asking an average of 173,000 forints (EUR 423) for their rental property.
According to the rental listing platform, in the past, tenants were able to follow the price increase due to regular wage hikes of recent years in Hungary. In Budapest, tenants were looking for apartments to rent for an average of 166,000 forints (EUR 405), which is a 23 percent increase year-on-year.
However, the platform also points out that Hungary’s double-digit inflation and the central bank’s recent decision to raise the base rate will likely lead to a noticeable increase in tension between landlords and tenants for the rest of the year.
In addition, the double-digit yields on inflation-linked Hungarian government bonds are now a real alternative for investors next to buying properties, ultimately leading to a slowdown in the number of rental housing available in the coming period.
The average yield of 4-6% on rental properties will be significantly below both inflation and retail government bond yields, making rental properties less and less attractive to those looking for investment opportunities.
At the same time, most Hungarians will be hit particularly hard by the explosive rise in food prices, which will reduce their rental income and make it harder for them to keep up with the prices dictated by landlords. As a result, the gap between supply and demand for rentals could open up more and more drastically in the near future, creating tension in the rental market,” according to Rentingo.com.
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