Coronavirus Brings Down Budapest Apartment Rental Prices
The experts of OTP Ingatlanpont mapped Budapest’s apartment rental prices and real estate market. The summer, and especially July, is typically a period of stagnation in the real estate industry due to students moving to Budapest just before universities begin in September. However, as a result of the coronavirus epidemic and the imminent restriction of short-term apartment rentals, such as Airbnb, rents have fallen in Budapest this year, and the consolidation of the housing market ended a period of steep increases in residential property prices as well.
The changes are well illustrated by the fact that a 50 square meter apartment in good condition in the inner districts, which previously cost HUF 150-160,000 (EUR 424-452) per month (not including utilities), now only costs around HUF 120-130,000 forints (EUR 339-367). Ádám Heinrich, senior sales consultant at OTP Ingatlanpont, told 24.hu that “as Airbnbs freeze [due to the coronavirus], owners have started to switch to long-term rental or have put these properties on the market (…) Due to the surge in supply, it is now possible to find a flat at a fairly good price even in the inner parts of the city if one is looking in the fifty square meter category.”
The coronavirus epidemic and the halt of tourism also decreased prices in the city center, namely in the so-called party district. The rent of many flats here slipped below the shocking limit of HUF 100,000, which was previously unthinkable. Before the epidemic, even a less-favored basement studio could have been rented out for HUF 100,000, and now furnished, renovated, small ground-floor apartments are offered for HUF 80,000. The decline is even greater for larger apartments.
Heinrich added that “in March and April, many landlords voluntarily offered trusted tenants a decrease in rent, because they feared losing them and not finding new renters to replace them. The market was also hit by airbnb flats, which were left without tourists. This also helped in the decline of prices, as many tenants took advantage of the opportunity to move to a cheaper but better-equipped apartment.”
According to the OTP Residential Real Estate Value Map, last year in the 7th district, the average price per square meter was HUF 703,000, while it was around HUF 597,000 and 662,000, in the 8th and 9th districts, respectively. According to experts, these prices show an increase of 231, 158, and 166%, respectively, compared to prices six years earlier. However, the real estate market is also showing a downturn, and potential buyers are currently waiting for a further fall in property prices.