FHB House Price Index rose to 175.44 in the first quarter of 2015, compared with the average of 2014, the houses increased by 8.2% in nominal terms and by more than 9% in real terms. The nominal increase was 3.7% compared with the last quarter of 2014. The latest indexed value of the house prices is nominally nearly the same as the beginning of 2005, and the prices were similar to the current one at the end of 2010 and the beginning of 2011, napi.hu said.
Due to the price increase of the recent quarters compared to the pre-crisis maximum, one can buy a home only 10% less, as opposed to the 21%-price difference, which was the low point. In real terms, the price level is the same as the end of the 2000s and the end of 2011-beginning of 2012 – FHB House Price Index reveals.
The domestic house prices are rising for over a year, moreover, at the beginning of the year the price rise increased after the slightly lower growth rate at the end of 2014. In the first quarter of 2015, the growth was 4% after the 2.5-3%- increase between July and September and October and November 2014, but it was slightly lower than the upswing observed in the second quarter of 2014.
According to napi.hu, despite last year’s temporary slowdown, the market is still having a momentum as the tprice rise of this year’s first quarter approached the highest figure so far. Since the one year, which lasted since onset of the upswing (from April 2014 to March 2015), the house prices increased by 14% in nominal terms and by 15% in real terms.
Constructions start slowly
The number of building permits, despite the significant increase, is only a fraction of pre-crisis level. Fewer houses were handed over than a year, but the number of handed-over houses exceeded the 2013 figures. Based on the nationally rising number of building permits, the developments should start soon. However, Budapest lost from its leading role in the second quarter.
The market of home loans remained strong, the total value of housing loans between April and June exceeded HUF 80 billion this year’s second quarter. The significant increase compared with the previous quarter was primarily due to the results in June, when the amount of new loans exceeded HUF 32.5 billion, but it also stably exceeded HUF 20 billion in the other two months as well, napi.hu said.
Loan placements increased by 40% on year/year basis in July, and compared to June, it significantly expanded by nearly 10%. The average fee of loans for houses continues to decline, the annual rate weighted with the contracted amount was 5.3% in July 2015, while the average fee of loans for houses was 5.7% at disbursement. The average amount of FHB residential loans paid over the past three months is more than HUF 8.4 million. There is an undiminished interest towards CSOK (Family Homemaking Discount) which positively effects the turnover and the lending as well.
According to real estate agents, the expected number of transactions can reach 150 thousand in 2015, compared to last year’s 100 thousand.
Here is the turnaround
It seems that the housing market turnaround has already reached the greater part of the country, because prices increased in all regions at the beginning of the year. The former lagging regions, Northern Great Plains and Northern Hungary are at the forefront in the rise. Prices are more than 10% higher in the Central Hungary and the West Transdanubia regions, which are the leader. The most modest growth was achieved by the Central Transdanubia region, but the rate of increase exceeded 5% here too.
Unlike the regional subdivision, there are still types of settlements showing a decrease: on a national average, house prices fell by more than 6% in county towns at the beginning of the year. However, in large villages, which suffered a significant 12%-decrease last year, the prices rose by 18%, which is the highest rate, in the first three months of the year, napi.hu said.
Where is easier to buy?
In Eastern Hungary, like in Nograd or Borsod-Abauj-Zemplen County, lower house prices belong to the lower monthly income, while in counties in a better financial situation, you can buy houses more expensively and from a higher income. In Gyor-Moson-Sopron and Komarom-Esztergom Counties, the prices rose more than the monthly income, compared to other areas. The strengthening of the former is especially significant compared to Vas and Zala Counties.
Affordability changed this way
Overall, the affordability of domestic houses significantly improved between 2000 and 2015, the home buying conditions worsened only in Heves County, where the house prices increased more than the monthly income, compared to 2000. The other county which differs from the general trend is Hajdu-Bihar, where the conditions remained almost unchanged, as opposed to the improvement experienced in most of the counties. Buying a home has become easier in Tolna and Zala Counties; the last 15 years also brought a better situation for the residents of Baranya, Vas, Fejer and Pest Counties.
FHB House Price Index was made of, besides the update of FHB market information and their own observations, the evaluation of all data processed by the National Tax and Customs Office during that period.
based on the article of napi.hu
translated by BA