Adjusted for inflation, household wealth has not grown as much

According to the latest “What do we live on?” wealth survey by the Magyar Nemzeti Bank, the median net wealth of Hungarian households was 30.6 million forints in 2023, which is 55.3% higher than the 19.7 million value in 2020. This indicator – as it indicates the wealth of the household in the middle – well reflects the situation of an “average” Hungarian household.

Increase even when adjusted for inflation

Although the Hungarian economy was hit by a total of 44.8% inflation between 2021 and 2023, real wealth still grew by 10.5%. This is much lower than the 50% real growth experienced between 2017 and 2020, but it is still a positive development despite the economic difficulties.

The poorest group closed as losers

Breaking down the wealth situation of households into deciles – that is, tenths – it can be seen that the net wealth of the lowest 10% not only increased, but also decreased: from minus 88 billion forints to minus 288 billion. This group has therefore sunk even deeper, while other groups have already experienced positive wealth growth.

It should be emphasized that the net wealth of the richest 10% alone exceeds the sum of the wealth of all other groups – this supports the severity of domestic wealth concentration.

What drove the wealth growth?

The increase in real estate prices plays a significant role behind the overall wealth growth, especially residential real estate, the value of which has increased by more than 60% in three years. Almost half of household wealth (47.8%) is in residential real estate, so their price appreciation significantly affects the overall picture.

However, if we exclude real estate from the calculation – as these are often not directly usable – a positive change in wealth is still visible in most groups. The exceptions are the poorest and the third decile, where a decrease can be detected, probably due to home purchases financed with credit.

Financial wealth: only the wealthier were able to outpace inflation
The value of financial assets (e.g. cash, securities, deposits) increased in all deciles, but only in the 8th and 10th deciles did it exceed the rate of inflation, i.e. only the wealthier were able to increase their financial wealth in real terms.

Summary: Wealth is growing, but the gap is widening
The overall wealth position of Hungarian households has improved, but inequality has continued to grow. The wealth of most households – especially their real estate – has also increased in real terms. The wealthy middle class has stabilized, while the bottom income decile has become more vulnerable and has lost proportionally the most.

The survey also underlines that financial security and wealth building require planning, awareness and often expert help, especially in an economic environment where inflation causes such a wealth distortion.