Biggest fall in real estate prices since 2009 in Hungary
The decline in real estate prices has accelerated in Hungary, according to the latest data from the Hungarian Central Statistical Office (KSH) for the second quarter of 2023. On a Q-on-Q basis, prices fell by almost 3% in the worst period of the coronavirus epidemic and at the end of 2009. This percentage is similar to the second quarter of this year, according to a recent analysis by ingatlan.com.
Fall in real estate prices
24.hu writes that in the second quarter of this year, the price of second-hand residential property fell by 2.9% compared to the previous quarter, according to KSH data. A similar decline was recorded in the last quarter of 2009. Even during the months of the pandemic lockdowns, the quarterly price decline was only 2.8%. László Balogh, Chief Business Expert at ingatlan.com, says:
The latest data confirm the trend that was already apparent from the evolution of supply market prices. The fall in prices is mainly due to a fall in demand caused by high interest rates, which can no longer be ignored by home sellers. Owners interested in selling are now having to reduce the price of their properties, which could be good news for buyers.
End of a rising tendency?
Forbes also notes that when considering the huge gap with inflation, it is also worth noting that house prices have risen at a remarkable rate since 2015. Compared to the second quarter of 2015, the price index has risen more than two and a half times, 262%, by the second quarter of 2023. The nominal increase for new homes is 306% and for second-hand homes 256% over eight years, as experts at Ingatlannet.hu point out.
A downward spiral in construction
The number of homes to be built on the basis of building permits and simple notifications issued in August was 1,380. It is 36% less than the number of housing planned in August 2022. In addition, 18% less than in August 2021 according to the freshest statistics of KSH. Even in August 2020, the year of the pandemic, the number of planned housing was still higher, with 1,411 units. In the first eight months of this year, the number of scheduled construction starts was 13,491, almost 42% lower than in the same period of 2022. The number of scheduled home constructions was 5,612, down 44% from last year.
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