Budapest Housing Prices Still on the Rise

Budapest has the second fastest growing property prices of any city in the world. (Flikr)

Budapest housing rental prices rose 7 percent this October. This increase is part of a larger trend of increasing real estate prices across Hungary: in 2018, property prices rose 24 percent across the country. 

Budapest has the second fastest growing property prices of any city in the world, according to data from the Global Residential Cities index. Only Xi’an, China surpassed Budapest’s property price growth rate of 24.2 percent in the second quarter of 2019.

While dramatic increases in Budapest rental prices have been linked to large scale population movements to the city in the past, economic expert Laszlo Balogh posits that does not seem to be the case now. The recent rental price increase is abnormal because it can be attributed to neither increased workers nor the annual influx of students. However, the steady increase in housing prices mirrors the rise of Budapest as a popular tourist destination. 

“In the entirety of 2018, commercial accommodation establishments registered a total of 12.5 million arrivals and 30.9 million tourism nights, up 5.2 percent and 3.8 percent, respectively, compared to 2017,” the Budapest Business Journal reported. Additionally, tourists who visited Hungary in 2018 averaged longer visits than in the past.

Despite increased tourism, the growth in Budapest’s housing prices illustrates the greater issue of skyrocketing housing prices across the country, which have been a serious concern for Hungarians since the 2008 financial crisis. In fact, between 2008 and 2017, housing prices increased 51 percent in Hungary. 

Housing prices throughout Central and Eastern Europe have also dramatically increased in the past year, most notably in the Czech Republic, Slovakia, and Poland. Hungary’s experience appears to be part of a larger regional trend.