In recent months, loans have been accompanied by extremely high interest rates, which has discouraged many from borrowing.Continue reading
Apartment rents rose by 1.7 percent nationally and by 2.1 percent in the capital in January compared to a month earlier, a turnaround from the stagnant, declining trend seen in September-December last year, according to a rent index by the Central Statistics Office and real estate website Ingatlan.com.
According to the data, rents were 20 percent higher nationally and 22 percent higher in the capital in January compared to the same period last year, and 75 and 69 percent higher respectively compared to 2015, reflecting the mind-boggling price increases seen in the property market in recent years.
In January, rents rose in all districts of Budapest in a month, with the highest increases of 3.5 percent in the Buda hill districts and 2-3 percent in the inner and outer districts of Pest.
László Balogh, chief economist at Ingatlan.com, said that
the January price increase is due to the fact that some of the students starting their study in higher education in the cross semester have entered the demand side.
The market was also boosted by those who postponed their home purchases for the time being and moved into rented accommodation due to high loan rates. Experience also suggests that the minimum wage increase – which was more than 16 percent in January this year – tends to push up rents, he explained.
In the capital, the highest rents are in districts V, II, and I, where owners offer rented properties for 250,000-330,000 forints (EUR 650-860) a month, while in the cheapest districts – such as districts X, XV, and XXIII – you can find rentals for half that amount. Of course, this is also due to factors such as the fact that district V is in the city center, and districts I and II are on the upmarket side of Buda. Meanwhile, district X is outside the city center and has less developed parts, as does district XXIII, which is one of the most peripheral districts of Budapest.
According to a recent analysis by Ingatlan.com, rents are unlikely to fall in the near future. One reason for this is that demand is stable, and there are a lot of inquiries for newly listed apartments. There is also plenty of supply in terms of tenants, with new students or new entrants to the workforce wanting to move out of their homes, constantly arriving. Meanwhile, the supply side is not keeping up with the intense demand, i.e. there are fewer apartments to choose from than is needed.
All of the above factors contribute to the fact that rents are not falling, and in addition, the current economic situation and high loan rates mean that many people may decide not to buy their own home yet, but to continue renting, further strengthening the market.
Featured photo via Pixabay
