Budapest housing crisis: Rising rents, stagnant wages and high inflation are making it harder for residents to find affordable homes. The city is investing $60m in new measures, but will it be enough?
00:00Zacharias Jelicnik and Julia Hourani wanted to stay in Budapest, but their search for a new apartment in the city proved challenging.
00:08I think we were quite lucky, actually, to be able to sell this flat, right? That's fair to say.
00:14So there weren't too many people looking at it.
00:17Housing experts say high inflation, stagnant wages and steep mortgage rates have pushed many potential buyers to rent instead,
00:26driving up demand and prices in Budapest's rental market.
00:29A joint report by the Hungarian Statistical Office and ingotland.com shows rental demand has risen by 14% this year compared to last.
00:40The financial potential of those people who want to rent an apartment is not growing in that pace as the prices are going up.
00:53It means that there is a huge stock which is not rented out because less and less people can afford rentals, for example, in Budapest.
01:06Budapest, once known for its affordable living, has become Europe's ninth most expensive city for rentals, driven in part by rising demand from investors.
01:15In early 2024, 4 in 10 buyers purchased properties in the city as investments, according to a Hungarian national bank report.
01:24Some areas like District 5 near the city center and others on the west side of the Danube have seen the biggest rent increases.
01:34One-bedroom apartments in those areas now average over $1,000 a month.
01:41Meanwhile, the city of Budapest has announced new measures to address its housing crisis, committing $60 million to the effort.
01:48The plan includes $5.5 million from EU funds to expand affordable housing and $23 million to renovate rentals and convert empty properties and the creation of a new housing agency.
02:02Recently, a central Budapest district announced it would ban short-term rentals starting in January.
02:09Shortly after presenting the plan, experts said rental prices began to drop.
02:14However, the decision has sparked mixed reactions.
02:17We can see that in other cities where they did the same regulation, it not solved the problem for affordable apartments.
02:28So that problem was not solved with banning short-term rent or Airbnb.
02:33With an additional mortgage, Julia and Zacharias fulfilled their dream of a larger apartment for their four children.
02:41But for many in Budapest, the rising cost of housing is forcing them to seek homes outside the city, trading the vibrant heart of the capital for more affordable horizons.
