Annual dynamics of house prices in Budapest grows

Press release – According to the latest National Bank of Hungary (NBH, in Hungarian: Magyar Nemzeti Bank – MNB) house price index, the annual growth rate of house prices picked up from 17.8 per cent in the previous quarter to 20.2 per cent in the capital in 2018 Q2.

In cities outside Budapest, the annual growth of 16.3 per cent in house prices in annual terms was close to the average in Hungary, but below the rates in the capital during the review period.

In municipalities, there was an average annual growth of only 11.8 per cent in house prices in annual terms. This was significantly below the national average. It also widened the gap between price levels in smaller and larger settlements. In 2018 Q2, according to the aggregated NBH House Price Index residential property prices rose by an average of 3.5 per cent in nominal terms, while annual growth in house prices stood at 16.2 per cent in nominal terms, down from 16.8 per cent in the previous quarter. In real terms, the annual growth rate of house prices was 12.7 per cent in the period under review.

The nominal average quarterly growth rate of house prices slowed down in all types of settlement outside Budapest relative to the previous quarter.

In Budapest, house prices rose by 5.6 per cent in nominal terms in 2018 Q2, which represented a 1 percentage point fall relative to the dynamics of previous quarter. However, the annual growth rate grew significantly, with the 20.2 per cent increase exceeding the national average increase in prices for 2018 as a whole by 4 percentage points. In cities outside Budapest house prices were up 3.8 per cent relative to the previous quarter in 2018 Q2, which is below the quarterly growth rate in the capital, but above the growth rate in Hungary as a whole. In municipalities, house prices increased modestly by a total of 30 basis points in nominal terms, significantly less than the previous quarter and the national average. With this, the annual growth rate was only 11.8 per cent, reflecting a slowdown relative to the previous quarters.

In 2018 Q2, house prices increased less strongly than in the previous quarter in every region of the country. During the review period, the growth rate of house prices was strongest in cities in Central Transdanubia. Here prices grew by 5.9 per cent in one quarter. This was followed by city house prices in the Southern Great Plains (at 5.6 per cent), in Northern Hungary (at 4.5 per cent), in Southern Transdanubia (at 3.9 per cent), in the Northern Great Plains (3.6 per cent) and in Western Transdanubia (at 2.3 per cent).

In annual terms, residential property prices in cities in Central Transdanubia showed the strongest increase in 2018 Q2 (21.4 per cent), followed by cities in Southern Transdanubia (18.4 per cent); growth in house prices was stronger in both regions than the national average annual
increase.

The aggregated NBH House Price Index for Hungary, presenting the national average of developments in house prices, rose by 3.5 per cent in nominal terms in 2018 Q2, reflecting a 3.1 percentage point fall relative to growth rate in the previous quarter. In real terms, the aggregated NBH House Price Index rose by 1.8 per cent in 2018 Q2, which was also lower than in the previous quarter. The annual growth rate of Hungarian house prices stood at 16.2 per cent in nominal terms and at 12.7 per cent in real terms in 2018 Q2.

Source: National Bank of Hungary