Buy property in Budapest: is now the right time for investors?

Hungary’s housing market in May was marked by a deceleration in price growth and significant regional disparities, according to the latest housing price index published by real estate portal Ingatlan.com, the company told MTI on Tuesday.

Property in Budapest

On average nationwide, real estate prices in May were 12.1% higher than a year earlier, compared to an annual growth rate of 12.5% in April. Monthly price growth slowed to 0.8% in May from 2% in April.

In Budapest, annual price growth stood at 19% in May, slightly down from 19.2% in April. Meanwhile, the monthly price increase slowed to 1.2% in May, following 2% in April and 4.5% in February.

According to László Balogh, lead economic expert at Ingatlan.com, housing demand in Budapest stagnated from April to May, so the deceleration in price growth was to be expected. However, high property prices in the capital continue to push buyers out into the suburbs.

Fresh data show that the price of residential properties in towns and villages across Pest County rose by 1.6% month-over-month in May—outpacing the rate of price growth in Budapest.

Nationally, the modest increase in demand in May led to restrained monthly price growth compared to April, but significant differences persist between regions.

The expert noted that buyers may have better bargaining power during the summer, as activity traditionally slows on the real estate market during this season. This seasonal effect, along with the currently high price levels in Budapest, indicates that no major changes are expected on the capital’s sales market in the near term.

Outside Budapest

Outside Budapest, local housing markets in areas with lower property prices may become more active.

He added that the summer period typically sees a boost in the rental market, which follows a fundamentally different dynamic from the property sales segment.

read also:

Can foreigners buy property in Hungary? A step-by-step guide

Young people are being pushed out of the real estate market in Hungary

The presence of younger age groups in the Budapest real estate market has declined, while the proportion of moves to smaller properties and purchases for the purpose of generational separation has also fallen, according to a recent analysis by Duna House. Although these effects are more pronounced in Budapest, similar trends are emerging in rural areas. As a result, activity in the more dynamic segments of the domestic real estate market, which young people previously drove, has slowed down.