How did digital nomads change the property rental market in Budapest?

Digital nomads in Budapest

Budapest regularly features on lists of best cities for digital nomads. It offers excellent infrastructure with fast internet, good public transport, and plenty of public spaces for work, such as cafés, libraries, and coworking offices. Most importantly, living costs related to the same high living standards are significantly lower than in western Europe.

Budapest attracts many types of digital nomads, especially with the spread of remote work options. The most obvious digital nomads in Budapest are:

• remote workers from western Europe,
• freelancers from the USA and from the UK,
• startup founders and IT specialists,
• international students,
• employees of international corporations.

Over recent years, the number of foreign residents has increased especially downtown, but it is hard to come by accurate figures because official residence permit statistics do not detail whether remote workers have white cards, tourist visas, EU registration cards, or other permits. In any case, the most attractive areas seem to be the following:

• District 5 (Belváros – Lipótváros) with central location and walkable area
• District 6 (Terézváros) for cafés, culture, good public transport
• District 7 (Erzsébetváros) for international community, lively night life
• District 9 (Ferencváros) for more modern apartments and better prices
• District 13 preferred by young professionals and expats

Rental market in Budapest then and now

Traditional rental market in Budapest calculated with long-term, Hungarian tenants. In line with this, long-term rentals are often empty – with no furniture or equipment other than what is built in. Utilities are typically handled separately. The lease agreement would state at least one year, while negotiations and administration are handled in Hungarian.

In contrast, apartments targeting digital nomads usually come fully furnished and equipped, often with a separate office or at least working area. Utilities are included in the monthly price, with emphasis on fast internet connection. There is English-language support for negotiations and agreements. Rental periods are more flexible, with constructions for periods anywhere below 12 months, including 3-6 months, or even just one month. Many of these apartments have been converted from short-term rentals, maintaining aspects of a serviced apartment that is ready to move in.

The impact of digital nomads on rental fees

Since foreign, typically Western European or American tenants who often pay in EUR or USD are willing to pay more for comfort, prices have been on the rise, especially in downtown Budapest. This can cause tension when locals and expats compete for the same apartments, but that is not always the case: while locals are typically more interested in long-term or mid-term rentals where they will use their own furniture and equipment, digital nomads are typically going for fully furnished and equipped, often premium quality rentals.

New opportunities for real estate investment

The rise of the digital nomad lifestyle created a new type of demand, which offers a promising new segment for investors. Premium real estate in downtown Budapest will easily attract tenants who are looking for ready-to-move-in accommodation with full service and flexible lease periods. Providing a supply to this demand is a safe investment with reliable ROI.

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