Hungarian real estate prices still sky-high despite recent price drops

Despite stagnation and a slowly arriving turning point in the Hungarian real estate market, prices were still higher in most cases in Q4 2022 than a year earlier, with a record low turnover rate as well.

The Hungarian Central Statistical Office (KSH) published its latest analysis of the changes in the Hungarian housing market. Record high prices resulted in record low turnover rates, which means that in some cases the inflation brought about even more disruption in the market than the Covid pandemic. Real estate prices soared last year, with the aggregate housing price index 16.6 percent higher than a year earlier, according to the Hungarian Central Statistical Office (KSH). According to telex.hu, this is more than the annual average inflation rate.

Hence, housing market sales fell by a fifth in Q4 2022. The number of houses sold fell all across the country except in the capital city of Budapest. KSH’s latest analysis confirms what most independent real estate agents have experienced in the last months: the price growth gradually slowed down during the year and turned into a decline in Q4 2022.

The price of new homes increased drastically

The average price for new homes, according to KSH, was HUF 54.5 million (EUR 145 thousand) in Hungary, up HUF 8.5 million (EUR 22 thousand) compared to the previous year. The average price per square metre is HUF 900 thousand (EUR 2,400), HUF 180 thousand (EUR 480) more than the average price in 2021.

In Budapest, the average square metre price exceeded HUF 1.1 million (EUR 2,935), up 21 percent compared to 2021. Among the districts with an increased number of new housing projects, only in District IV would it be possible to find a newly built apartment for less than HUF 1 million per square metre. At the same time, the limited number of new apartments available in District XII already sold for an average price of over HUF 2 million (EUR 5,338), while those in District V, in the heart of Budapest, close to the Parliament, were close to HUF 2.5 million (EUR 6,672).

Read also: Rental prices in Budapest continue to rise steadily

Positive trends in the second-hand Hungarian real estate market

In Budapest, a second-hand apartment costs on average HUF 47.4 million (EUR 126 thousand), HUF 7 million (EUR 18 thousand) more than in 2021. The main increase in price was for panel flats, up by 23 percent in a year to nearly HUF 36 million (EUR 96 thousand). The price of non-panel condominium apartments increased by 18 percent to HUF 48 million (EUR 128 thousand), while the price increase for detached houses in the capital was more moderate at 13 percent, but their average price still reached nearly HUF 80 million (EUR 213 thousand).

Prices have increased steadily but at a slowing pace over the year, with only the last quarter showing a slight 1 percent decline. However, prices for second-hand detached houses fell significantly in Q4: the average price dropped by 29 percent.

In 2022, the energy efficiency aspects of the housing market have become more important for buyers. According to KSH, the quality of second-hand detached houses for sale is low, as their utility costs can be more than four times higher than that of new homes.

As we have previously reported, due to the low energy efficiency of second-hand homes, potential buyers can save big on purchasing Hungarian real estate, as their bargaining position is much stronger than before the utility cost crisis.