For the first time in almost two years, rents fell in December 2022: by 0.7% nationally and by 0.9% in Budapest in one month. Within the capital, the biggest decrease was in the inner districts of Pest. Nominal rents remain significantly higher than in the same period of the previous year. In real terms, however, they have been on a downward trend since August, falling by 13% nationally and 15% in Budapest compared to the pre-pandemic peak in January 2020.
Rents moderated in December
The rapid increase in rents, which started in 2021, slowed significantly or stopped in August-November 2022 and turned into a decline in December. Compared to the previous month, supply rents fell by 0.7% nationally and by 0.9% in Budapest, essentially matching the October level.
December rents were 20% higher than in the same period last year nationally, 22% higher in Budapest and 73% and 65% higher than the base period in 2015.
Since March 2022, nominal rents have exceeded their pre-pandemic peak in January 2020 (by 19% and 15% in December 2022) both nationally and in Budapest. In real terms, however, they have been on a downward trend since August. Taking the consumer price index into account, real housing rents in December were 13% lower than in January 2020 nationally and 15% lower in Budapest.
In Budapest, apart from the "other" districts of Buda (+0.3%), rents fell in all groups of districts compared to the previous month, with the biggest decrease of 2.4% in the inner districts of Pest. Rents fell by 1.4% in the outer districts of Pest, by 0.7% in the hilly districts of Buda and by 0.3% in the transitional districts of Pest.
Rents in the inner districts of Pest continued to be the highest year-on-year (24%), while rents were 22% and 21% higher in the transitional districts of Pest and other districts of Buda respectively, and 19% and 17% higher in the outer districts of Pest and the hilly districts of Buda respectively.
In 2022, the supply of housing for rent is significantly lower than in previous years
In 2022, 58% of the ads considered were for dwellings in the capital, 27% in a city with county status and 13% in a city without county status. The number of advertisements decreased significantly, down by more than a fifth from both 2020 and 2021. The decline was largely due to the drop in the capital city.
The average floor area of dwellings advertised for rent in 2022 was 54 m2 in Budapest and 57 m2 in the cities with county status. In the smaller settlements - the non-county towns and villages - the dwellings for rent were generally larger, with an average floor area of 64 m2.
The rental dwellings with the largest floor area (73 m2 on average) were still advertised in Pest county. In different areas of the country, the average size of dwellings for rent has remained fairly stable, despite considerable fluctuations in their number over the recent years.
In the second half of 2022, average monthly rents were highest in the Pest region and Budapest (217 and 207 thousand HUF respectively) and lowest in Northern Hungary (112 thousand HUF). In terms of the increase in rents compared to the previous half-year, the Pest region and Southern Great Plain represented the two extremes, with the former at 17% and the latter at only 4.0%.
Nationally, the vast majority (93%) of the advertisements observed were for flats in multi-family buildings, with the remaining 7% being for detached houses. In Budapest, however, only 3.3% of dwellings for rent were detached houses. In 2022, 44% of advertisements in the capital and 46% nationally were from private individuals.
Further data and information
Methodology
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Related data (Weekly monitor)
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