Rental market paradox: Steep prices meet falling demand in Budapest

The Budapest rental market has started the year with high turnover but stagnating rental prices, according to the latest analysis by Rentingo. January saw a widening gap between supply and demand prices, with the average demand price at HUF 212,000 (EUR 525) and the supply price at HUF 248,000 (EUR 615), creating a 17% price gap.

Rental market dynamics

According to Rentingo, the rental market in Budapest is experiencing an unusual trend. Typically, the first months of the year see a surge in demand due to several factors. Many people decide to make life changes, such as moving or living together, around the end of the year, which is reflected in the market at the beginning of the new year. Additionally, January often brings pay raises, improving tenants’ financial situations and potentially increasing their willingness to seek new accommodations.

The market is also usually bolstered by an influx of domestic and international university students entering the rental market in late January and early February, just before the new semester begins. However, this year has seen a departure from the norm. The usual influx of foreign students, particularly those on Erasmus scholarships, has significantly decreased. This change has been noticeable since September 2024 and has had a substantial impact on the market.

Impact on landlords and tenants

Landlords are finding it challenging to increase rental prices, with the market showing clear signs of stagnation. While there are still many international students in Hungary, they are primarily here for full-degree programs supported by various domestic scholarships, such as the Diaspora Higher Education Scholarship Program and Stipendium Hungaricum.