Budapest property market turned upside down: you can swap your panel flat for a brand-new build, free of charge!

Panel flats used to represent the affordable, budget-friendly segment of both Budapest’s and Hungary’s property markets. But the government’s new 3% discounted home loan, coupled with a recent surge in property prices, has created some unusual situations. For example, in certain Budapest districts, you can now buy a new flat for the same price as someone selling a panel flat. With thousands of new apartments currently under construction, this bizarre pricing is unlikely to last — forcing sellers to rethink their strategies.

Budapest property market turned upside down

A deep dive by ingatlan.com highlights this strange phenomenon in Budapest’s 15th district. Thanks to the Otthon Start scheme, a significant wave of new housing projects has kicked off. Here, the price per square metre for panel flats and newly built apartments is almost identical, ranging from 1.1 to 1.3 million forints. In practical terms, you could purchase either a 50-square-metre panel or a brand-new flat of the same size for between 60 and 65 million forints — a scenario unheard of in Hungary’s property market.

In Rákospalota, 3,000 to 4,000 flats are set to rise soon in the Novus Liget and Szilas Liget residential parks, with sales already underway. The latter is being developed by Bayer Construct, whose geothermal energy project has made headlines—though their current geothermal wells are reportedly threatening Budapest’s thermal baths. The first new homes are expected to be ready this year, with the last deliveries by 2027.

This situation has serious implications: the geothermal heating system of a Zugló office and shopping complex is reportedly risking the city’s prized thermal baths.

Market impacts include:

• The parity between new build and panel flat prices could shift buyer interest towards modern, newly built properties.
• This may trigger a price drop or correction in the outer districts’ housing markets — a trend already beginning in the 15th district.
• Buyers of new homes, especially Otthon Start projects in redevelopment zones, are entitled to a 5% VAT refund, which can save them millions more.
• Alongside the Rákospalota projects, about 2,200 Otthon Start flats are expected to be handed over soon in the 11th district, with other peripheral districts like Csepel also seeing new residential developments.
• In Újbuda, the average price per square metre for panel flats is around 1.46 million forints, making new apartments priced below 1.5 million forints very competitive — some even cheaper than existing panels, depending on location.

Expert insight:

• It’s unusual and unsustainable over the medium term for used panel flats and premium new builds to be priced the same.
• If the current pipeline of projects progresses steadily, 2027 could see record numbers of new home deliveries.
• The last significant wave of housing construction was back in 2004-2005, when more than 40,000 new flats were completed.

Read also:

• Revealed: These nationalities buy the most property in Hungary – surprising countries in the top ranks
• Billions cut from the price of Hungary’s Ministry Headquarters: why does it have to be sold so fast?

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