Massive changes coming to the Hungarian real estate market: sellers are suddenly willing to negotiate?

The changes in property prices are barely noticeable at the moment. However, based on the data of otpotthon.hu, sellers have started responding to the shifting trends in the real estate market, and more and more contemplate price reductions. 

Real estate for sale up by 40 percent

In the second quarter of 2023, compared to the same period in 2022, the number of real estate ads for sale increased by nearly 40 percent. At the same time, properties for rent dropped more moderately, by 18 percent. In the period from April to June 2023, the most ads for real estate for sale were posted in Budapest, followed by Pest County, while the fewest were listed in Tolna and Vas Counties, writes penzcentrum.hu. In terms of average square meter prices, in the second quarter of 2023, they rose the most in newly built residential parks, by 26.7 percent compared to the same period last year. During this period, the price of apartments shot up by 5.36 per square meter, and that of houses by 3.7 percent. Compared to the previous year, however, the prices per square meter of vacation and weekend houses fell by almost 11 percent.

Real estate owners are willing to reduce prices

The plummeting prices can already be observed when we look at ads posted earlier than the second quarter of 2023. Based on the data of the real estate advertising portal, between January and June 2023, there was no change in prices in the majority of the ads (68 percent), however, in more than a quarter of the cases (28 percent), prices moved downward; and in only 4 percent of the cases did the advertisers increase the prices compared to the originally stated figures.

“The statistics show that there is a psychological limit for advertisers when it comes to price reduction,” says Zsuzsa Lipták, managing director of OTP Otthonmegoldások Ltd. “The willingness is most evident among those who have been advertising for 3-6 or 6-12 months. 37.7 percent of those who advertised for a quarter to a year and a half, and 38.5 percent of those who advertised for a year and a half gave up on the original price in the first half of 2023. These are the properties that were added to the advertising database at a time when inflation was skyrocketing and utility prices were soaring, so it can be assumed that the sellers did not realise the significant changes taking place in the real estate environment at that time,” explained the expert.

Sellers stick to every penny in rural Hungary

In the light of price changes in rural areas in Hungary, it can be seen that the initial advertising prices remain the same in the majority of the cases (70 percent), and only in a quarter of the cases (26 percent) they drop slightly. In Budapest and Pest Counties, 65 percent of the amount indicated at the first appearance of the ad is left unadjusted, and based on the data, the chance of a reduction is slightly higher (31 percent) compared to rural regions.