Contradictory numbers: What’s happening with property prices in Hungary?

The Hungarian central bank’s (MNB) latest house price index for the second quarter of 2023 has been published. It shows that the annual growth rate of property prices has slowed down significantly in Budapest and in rural cities.

However, the picture is very different when we look at the figures in real terms. In that case, the report shows that prices have fallen in all categories. Adjusted for inflation, prices in Budapest have fallen by 14% in a year, and by 25% in the municipalities.

Moderate rise in property prices when looking at nominal values

In the capital, property prices rose at a moderating quarterly pace of 1.1% in the second quarter of 2023, following a 2.7% increase in the previous quarter, Portfolio writes based on MNB’s index. Nominal annual property price dynamics have thus slowed to 4.9%.

In rural cities, house prices fell by 1% in the second quarter, following a 4.3% increase in the previous quarter. Thus, on an annual basis, the annual property price dynamics slowed from 9.5 to 1.1%.