House prices continue to rise by more than 20 per cent annually in Budapest

According to the latest MNB house price index data, at 22.5 per cent in annual terms, hose prices grew slightly more slowly in Budapest in the period between 2018 Q2 and 2019 Q2 than the annual growth rates recorded in previous quarters. In rural cities, annual nominal growth in house prices was 21.6 per cent, only slightly lower than in the capital. This was comparable to annual price changes observed in 2019 Q1. In municipalities, the annual nominal increase in house prices was only 2.9 per cent, more than 14 percentage points below the national average.

According to the aggregated MNB House Price Index, Hungarian residential property prices rose 4 per cent on average in nominal terms in 2019 Q2. Annual growth in house prices was 17.1 per cent in nominal terms, up slightly from 16.8 per cent in the previous quarter. In real terms, the national average annual growth rate of house prices was 12.8 per cent in the period under review.

In 2019 Q2, the nominal average quarterly growth rate of house prices was 4.1 in Budapest.

This represented a 2.4 percentage point decline relative to the previous quarter. The annual growth rate of house prices also slowed in Budapest relative to 2019 Q1; however, at 22.5 per cent, housing price growth in the capital exceeded the nominal increase in the national house price index by more than 5 percentage points. In cities outside Budapest, house prices rose by 3.7 per cent in 2019 Q2 relative to the previous quarter. The annual nominal increase in prices was 21.6 per cent, slightly less than the annual growth rate recorded in the previous period. Whereas at the end of 2018, house prices fell in municipalities relative to the previous quarter, they rose by 4.4 per cent in 2019 Q2. The annual growth rate of house prices was 2.9 per cent in small settlements. This continued to be significantly below the national average. As a result, the price gap between municipalities and cities continued to widen.

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In most regions, quarterly growth rates of house prices slowed in cities outside Budapest in 2019 Q2 relative to the previous period.

Annual housing price growth slowed in some regions of Hungary, while in others it picked up in rural cities.

The most pronounced rise in prices was recorded in cities in Southern Transdanubia, the Northern Great Plains and Central Transdanubia.

In these regions, house prices grew by 24-24.5 per cent in nominal terms relative to 2018 Q2. House prices rose by 23.5 per cent, 20.1 per cent, 17.4 per cent and 13.4 per cent in annual terms in the Southern Great Plains, Northern Hungary, Western Transdanubia and Central Hungary, respectively. On balance, the growth rate of housing prices in cities in most regions exceeded the national annual average increase.

The aggregated MNB House Price Index for Hungary, presenting

the national average of developments in house prices, rose by 2.1 per cent in nominal terms and by 2.1 per cent in real terms in 2019 Q2.

The aggregated MNB House Price Index stood at 17.1 per cent in nominal terms and at 12.8 per cent in nominal terms in 2019 Q2. As a result, the annual average growth rate of Hungarian house prices picked up marginally, by 0.3 per cent, in 2019 Q2 relative to the previous quarter.

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Source: MNB – press release