Does Budapest Face Depopulation? Main Reasons and Outcomes

The population of Budapest, the capital city of Hungary, has been declining for five years. The number has significantly decreased by almost 13 000 and this can be partly explained by the pandemic. As a result, the demand in the real estate market has changed, as the urban population went to the countryside, searching for properties in the agglomerations. According to the official data, the population of Érd increased by 775 people in one year, the total population increased to 70,000. The population of Szigetszentmiklós increased by 513, so the city’s current population is 40,000, and the community of Veresegyháza increased by 503. The rapid population changes affect the housing market. The real estate prices in the most popular settlements changed compared to the Budapest tendencies.

At the end of April, the average price per square meter in Budapest was 704,000 forints, 296,000 forints more than the typical supply price in the towns and villages of the Budapest agglomeration. The level of average square meter prices registered in these settlements formed only 58−78% of the average level in the capital.

In Budapest, property prices started to increase in 2014, which also intensified the migration of Hungarians from the capital to the agglomeration. However, the rapid price increase in the real estate market of the Hungarian capital almost stopped in 2020 by the emergence of the pandemic. Similarly, a slower pace could be experienced in other big cities while the increasing population in the agglomeration has caused exceptional growth in the property prices of these areas.

As business Analysts argued at the beginning of 2021, the rental prices may rise again from Summer as the coronavirus vaccination rate increases and the tourism industry returns to its pre-pandemic roots. Even though the market showed positive changes in December, the standard prices are still quite low. However, apartment owners still ask for two months deposit for newly promoted apartments instead of one. Therefore, the market still functions normally and shows signs of future stabilization.