Housing Too Expensive in Hungary

Housing-related costs have increased disproportionately in Hungary in relation to family income. As a result, many households are unable to raise the payment of own resources for the purchase of their own home, they are forced to rent a home for lack of a better solution.

However, an analysis by Deloitte Hungary says, renting is an expensive solution. In Hungary, about 46% of tenants spend more than 40% of their disposable income to pay for housing costs. This figure is the third worst in the EU. Falling rents due to the pandemic emergency will temporarily alleviate the severity of the problem, but without a well-thought-out and systemic change, the issue could become burning again after the economic settlement.

According to Deloitte experts, the problem can be addressed by encouraging the construction of affordable housing, which, in addition to the recently announced home-building program, is focused on encouraging rust belt residential construction, has countless good examples across Europe.

There are also demographic and market reasons for the unfavorable change in the rental market. The educational, labor market and investment opportunities in Budapest are the best in the country, so most people try to settle in the capital, both from Hungary and abroad. There is another reason for this: although there is a high demand for market-based apartments, their supply lags far behind demand, which increases rents. Previously, domestic market participants were not adequately encouraged to build residential properties that could be rented out for a lower fee therefore being affordable.