Charming for some, annoying for others

The fastest-growing tourism segment has been in short-term rentals. The amount of such accommodation in Budapest grew by 80 per cent between 2020 and 2024, and the city now has more Airbnbs than hotel rooms, which is unprecedented in Europe. Some 40 per cent of guest nights are spent in Airbnbs, compared with the European average of only 28 per cent.

This exponential growth has, inevitably, had its downsides. What tourists find charming – ruin bars, party districts, outside terraces, relatively low prices (for them) and a wide variety of accommodation – many locals find annoying or even unbearable. Noise, litter, drugs, drunken young men and stag parties have become a daily nuisance for many downtown residents.

The Hungarian government has acknowledged the problem, but didn’t hesitate to milk the booming industry at the same time. In 2024, it quadrupled taxes and fees on Airbnb rentals, but also introduced a two-year moratorium on registering new Airbnb apartments. It also allowed the capital’s districts to impose further regulations, such as capping maximum rental days.

Mayor Soproni of the liberal-left Momentum party seized the opportunity. The 6th District – home to the capital’s prestigious Andrassy Avenue, the Hungarian State Opera, and a number of theatres and museums – has a particularly high concentration of Airbnbs, making up 8 per cent of its total housing stock. The area lies next to Budapest’s renowned party zone, frequently drawing groups of young men intent on getting hammered. So in 2024, Soproni organised an online referendum on banning Airbnb rentals in his district; he won a majority, though turnout was low at just 20.5 per cent. Nevertheless, Hungary’s Supreme Court gave the green light to the ban on November 11, allowing it to come into force on January 1, 2026.

“This was a democratic exercise,” Soproni explains. “We have listed the pros and the cons, and people had two weeks to cast their votes online – 54 per cent voted for a ban.”

Rug pulled out from under feet

Time is now ticking for many homeowners and small businesses in the district. “I am devastated,” Nora Suveges confesses to BIRN.

A former ballerina at the Hungarian State Opera, Suveges has been supplementing her income by renting out two small apartments in the 6th District. “This was my secondary income; now, since I left the stage, it has become my primary revenue,” she says.

Suveges says she knows many pensioners who saved for decades, forint by forint, to buy a small flat to rent out and supplement their meagre pensions. “I have followed all the regulations, invested in the apartments, stayed up late to let guests in, paid all fees and taxes – and now I feel like I’ve had the rug pulled out from under my feet,” she says desperately.

There is, of course, the option of renting out her apartments long term, though this, she argues, would bring in less money for more risk: “During Covid, with no tourism, I had long-term tenants. They made a mess. Airbnb guests come and go, but they are tidy; it is long-term tenants that can cause real damage.”

Suveges plans to wait and see how the situation evolves, perhaps seeking foreign tenants who can pay higher rent.

In any case, she adds, “banning Airbnb in the district will surely not solve the housing problem.” Rents rose by over 10 per cent in 2024, and while that growth appears to be moderating somewhat in 2025, many think it is a natural phenomenon – the Hungarian capital still lags behind Warsaw or Prague, let alone Vienna, in rent levels.

Suveges and other critics also fear that shutting down the Airbnb segment will harm the district’s broader economy. With fewer foreign visitors, the thriving cafes, bakeries and restaurants – valued by locals as well tourists – will suffer, forcing some to close.

“The district earns around 1 billion forints [2.6 million euros] from the taxes and fees we pay – this is a huge amount of money to throw out the window,” Airbnb advocate Schumicky says, adding that he regards the ban as an outright anti-market measure. “Taking away the possibility to rent out apartments as we choose is almost like going back to Communism. What’s next? Our flats are going to be confiscated?”

While Airbnb landlords acknowledge that there are problems associated with such short-term rentals, they think these could be better addressed by regulation and cooperation. “Most problems arise from illegal Airbnbs – the ones that aren’t registered and don’t pay taxes. Those operating legally have a vested interest in maintaining good relations with neighbours and ensuring peaceful coexistence,” Schumicky asserts.

Schumicky cites the example of Barcelona, where a 24/7 hotline exists for complaints – if the apartment owners don’t resolve the issue, they can potentially lose their license to operate. There are also noise detectors in Airbnb apartments to warn guests when levels rise. Street noise and basic sanitary needs – more public toilets and regular street cleaning – should be handled by the police and district authorities. This could be a model for other cities, he says.

Yet critics would point out that despite all those measures, Barcelona is still planning to ban Airbnb entirely by November 2028.

Mayor Soproni, however, is optimistic the loss of income due to the ban won’t be too drastic. “We have reassessed the loss in revenue, it would be around 300 million forints – this is manageable,” he tells BIRN.

Soproni believes the move will also help tame galloping rises in rent and property prices – if not stop the increases entirely, at least mitigate them. “Since we announced the ban, there is growing demand for flats in the district, and prices only went up by 7 per cent, while in the neighbouring districts it is still 15-18 per cent,” he says.

The mayor is proud of having a leftist agenda and says the district could become a positive example of how to bring about more affordable housing: “My dream is to make the 6th district affordable even for mid-career teachers or policemen – the real middleclass, not just the rich.”

Trailblazer

Budapest’s 6th District will be the first in Hungary to impose an outright ban on Airbnb rentals, though whether other districts in the capital will follow suit remains to be seen. Current polls indicate there is little support for an overall ban in the Hungarian capital, but some restrictions would be welcome.

Airbnb advocate Schumicky says experience from other international capitals shows that where short-term rentals were capped, the industry declined overall without producing any more affordable housing – and the only beneficiaries were large hotel chains, whose prices rose. New York City, for example, introduced an almost-complete ban in 2023 by forbidding short-term rentals of less than 30 days. The measure led to surging black market rentals and skyrocketing hotel prices, with no discernible effect on reducing rents or real estate prices.

The former ballerina Suveges also believes that global tourism is in a phase of fundamental change and Airbnb is merely part of this change, making travel affordable for many more people. “We can’t turn back time – it would be like throwing out flatscreen televisions and forcing people to watch in black and white. It is simply ignoring the reality,” she says, adding that Airbnb hosts are being “treated as scapegoats” for the global phenomena of overtourism and short-term rentals.

However, others think these market forces shaping modern tourism need to be curbed so local residents are not run over by them. “I believe the EU should have addressed the phenomenon long ago. The technological transformations of our world, like the spread of Airbnb or the exploitation of couriers, have caught politicians and regulators by surprise,” Mayor Soproni says.

“If we go on like this, all downtown areas will look like a kind of Disneyland, having the same chains, attractions, restaurants – and with no local residents left!” he says.