Is Budapest expensive?

An interesting figure was published on Bloomberg showing where Londoners might potentially go after Brexit.

This figure shows how expensive accommodation is compared to wages in different European cities. Oddly, Budapest is among the most expensive ones. We compared some data (both Bloomberg and we got the data from Numbeo, which – to be honest – is not the most accurate) from the region to see how this conclusion was made.


Budapest Vienna Prague Warsaw
Price to Income Ratio 13,5 13,7 15,7 11,3
Price to Rent Ratio (City Centre) 23,5 36,1 30,2 21,2
Price to Rent Ratio (Outside of Centre) 19,6 28,4 26,0 19,0
Gross Rental Yield (City Centre) 4,3% 2,8% 3,3% 4,6%
Gross Rental Yield (Outside of Centre) 5,1% 3,5% 3,9% 5,3%
Mortgage* as Percentage of Income 105% 83% 95% 79%

* 100% mortgage is taken on 20 years for the house (or apt) of 90 square meters

Bloomberg used two data to calculate prices – mortgage instalments and price to income ratio. According to Numbeo, Budapest is not the best in this regard, however, on their own, house and apartment prices compared to income are average. The former could be a typical feature of the banking market, while the latter one is the consequence of that in Budapest, rents are higher than house prices (again, based on the data found on Numbeo) – here and in Warsaw, high yield can be achieved by lending. It could have two reasons: the lack of central regulation (and as its result?) the high ratio of Airbnb.

All in all, based on the housing prices in Budapest (according to Numbeo), we should not expect masses of labour arriving from London. …and neither on any other basis.

Original date of Hungarian publication: October 24, 2017