Real estate market continues to flourish in Budapest

Demand has increased for rural homes, more and more people are buying properties in rural big cities as an investment – hvg.hu reports.

Hungarian housing market is still flourishing, regarding prices, demand, and sales. According to official data in the first half of the year more than 55 thousand residential properties changed hands, which means a 5 percent increase in annual comparison. The increase of prices slowed down, but on average the flats sold in the first half of the year cost 9 per cent more compared to last year – reveals the latest analysis of ingatlan.com, which uses the latest Central Statistical Office data.

László Balogh, leading economic expert at ingatlan.com said that the newest data shows that the price increase did not block the growth in sales. This is partly the result of the decrease of the importance of Budapest in a sense that

more and more sales take place in the countryside, and the housing loans also helped the increase of the number of sales.

He added that the family home-creation allowance (csok) contributed greatly to the recovery of the rural market as the state subsidies represent much higher rates due to lower rural prices.

According to the analysis of ingatlan.com, 72.5 percent of homeowners look for a real estate for less than 30 million HUF (~100,000 euro). In the most popular category, that of homes costing less than 30 million HUF, there are many more residential properties in the country, which also spins the market of houses out of the capital.

László Balogh highlighted that rural big cities are being included on the maps of investors, because investors who buy properties for 5 to 10 million will no longer be able to compete with the Budapest prices, so they either take out a loan or buy at a lower price in another city.

In the case of purchases for investment, there is little difference between the yields in popular smaller cities and the yields available in Budapest.

According to the data of the Central Statistical Office, before 2014 the average square meter price of real estate sold in the capital and countryside was only twice the difference, which has now almost been tripled.

Within Budapest there are huge differences too, the average price is 524 thousand HUF per square meter but in the priciest districts (I., V., II.) the average price is at least 700 thousand HUF. But there are also neighbourhoods, including the XXIII. and XXI. district, where the average price per square meter was below 350 thousand HUF.

Outside the capital, prices are much more favourable: in the central region of the country the average square meter price is around 1000 euros, in the Transdanubian region around 800 euros, in Eastern Hungary it is about 650 euros.

Source: hvg.hu