The rental hunt on again in Hungary
Wednesday, 13, September 2006 11:40:00 AM
Once again, summer's end sees a revival in the rentable apartment market as thousands of students look for temporary lodging in Hungary. There are no exact data about the volume of demand, as most people rent apartments without informing tax authorities. In the most frequented sites of Budapest, rental prices are typically HUF 1500 per square meter and HUF 1000 per square meter downtown, real estate magazine ReSource said in its latest issue.
At this time of year, the rentable apartment market hots up in the other larger Hungarian cities as well. That can be seen partly in the increase of inquiries and signed contracts, partly because less and less time is needed for a tenant to find a new renter.
However, it is impossible to judge exactly how many people are looking for flats in the different areas of Budapest and other cities, and the increase in demand in the past weeks can only be estimated, points out Otthon Centrum head analyst Dávid Valkó.
Valkó says that there has been a clear tendency recently for clients to opt for empty flats, indicated that single rooms for rent are no longer popular. This has become more prevalent since today it is marginally more expensive to share a flat with other students, thus reducing monthly rental to as low as HUF 15,000-20,000 per person.
Smaller flats are wanted, not only by students, but also by young couples. The lowest category is popular among those starting a career, and those who commute. Sometimes prospective buyers of new apartments must first occupy a rentable flat as a temporary solution. Smaller panel flats in Budapest can be rented for HUF 40,000-50,000 per month.
Those looking for a long-term rental usually do not select from the cheapest supply. Most customers in this category are willing to pay HUF 60,000-80,000 per month. But there are more expensive apartments on the market too, with prices of HUF 100,000-120,000 per frequently seen. These flats are affordable mainly for foreign students interested in renting in the 5th, 6th, 9th district or nearby Móricz Zsigmond körtér, Valkó specified.
For high-quality apartments in downtown Pest or inner Buda as much as HUF 150,000 per month may be charged; such elegant properties in Buda, however, which were so popular not long ago, are declining. In contrast with the 1990s, when renting out a villa was convenient, top managers now hardly ever appear in the rental market. At many corporations, the Hungarian affiliate company is already run by Hungarian managers, and trends show that multinationals buy a property instead of renting.
If foreign businesspeople come to rent, they are ready to turn to real estate agencies, but that is not characteristic in the rental market, explains Duna House head analyst Ákos Murányi. Murányi says that, although there are flats of good location to be found only at agencies, most renters prefer searching individually, and 90% of the tenants leave no paper trail. The two perceptible annual spikes in this market occur in August and December. Of course, young couples also seek lodging, and the quality of the place they can find basically depends on their budget, opines Murányi.
Most people look for a downtown location and good accessibility by public transport, and many take into account the distance between the chosen flat and their school or workplace. In this context, however, a mistake is as bad as in the new apartment market.
One advantage of a rental flat is that leaving it is easy. The supply is large, but according to Murányi, finding a suitable place is not always so easy. Overhead expenses of cheap rental flats located far from the city center may considerably increase monthly costs; alternatively, if maintenance costs are low, the rental rate is usually high. Tenants are becoming more and more conscious and frequently renters to register the phone in their own name, in order to avoid later discussions about the bill.
Open House sales manager Szabolcs Molnár believes there is a new phenomenon in the rental market, in that although there are still few interested in additional luxury services, some renters are already insisting on Internet availability and/or air conditioning. For the time being, such factors matter to only about 10% of renters, but this can be expected to increase in the future as these services gain importance.
Molnár also explained that in his firm's hometown of Győr, there was a demand for flats of 50-60 square meters or less, particularly in the HUF 30,000-60,000 price range. The late summer market situation is reflected by the fact that with intensive advertising, tenants can surely find a renter. In other periods oversupply can be slightly felt, but looking for a renter does not take longer than one month, that time either.