Property prices start to fall in Hungary

A turnaround in the property market is underway. Some house prices will fall and price rises will slow this year. Family support options are a big help for lots of people. Many can and probably will also use it to buy a home.

Prices for more energy-intensive, less modern housing could fall and the overall rate of price increases could slow significantly in 2023, napi.hu reports. According to experts interviewed by Magyar Nemzet, the demand for rental housing may increase because more people will not be able to buy their own home. At the same time, maintaining and extending family support options could help many. These financial support options include village CSOK and baby loan.

“The real estate market reached a turning point last year. In addition to the gradually declining number of sales, we have seen a slowdown in the market, but this restraint has not yet been reflected in the change in property prices until the end of the year. This trend is expected to continue in 2023,” Károly Benedikt, head of analysis at Duna House, told Magyar Nemzet. According to him, the number of apartments that will change hands this year is much lower than last year’s 125,000 sales, at around 90-110,000.

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Much depends on the performance of the economy

Many people have been priced out of the housing market altogether because they have fallen out of credit or only qualify for a lower loan amount. This forces them to lower their expectations for their home. According to Károly Benedikt, both house prices and sales will be significantly affected by how the economy performs.

“If economic recovery begins in Hungary in the second half of the year, this will also have a positive impact on real estate market activity,” he said. The turnaround in the domestic housing market has also come as the mass exodus that occurred during the pandemic has subsided, with more people considering moving back.

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Location and type matters

At the same time, the head of analysis pointed out that the trends in recent years have shown a dynamic increase for all types of housing. However, towards the end of last year, price increases slowed down. In 2023, it is expected that prices will become more distinct in different locations and for different types of property.

Duna House expects prices to fall for non-modern homes, while for modern apartments and houses with smaller floor areas, prices are expected to stagnate, and in some cases to rise slightly. However, prices of newly built properties may continue to rise due to the increase in the cost of building materials and construction.

According to Károly Benedikt, increasing insecurity and financial difficulties may lead to more people looking for rented accommodation. This will also affect investor appetite and changes in rents.

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Source: napi.hu, Magyar Nemzet