Crazy price increase in Budapest real estate market – New results!

The price per square metre of newly-built apartments in Budapest has doubled over the last decade. Therefore, it is not surprising that since 2013 the second-highest growth of property prices have been registered in the Hungarian capital. The rise in the Budapest real estate market prices even precedes trends in Warsaw, Bratislava and Zagreb. We will now examine the extent of this increase and present you the most expensive districts in Budapest!

As we previously reported, property prices in Budapest has been skyrocketing in the last few years. This has been underpinned by a newly published survey of KPMG, according to which, Budapest has registered the second-highest price increase of newly built apartments since 2013. Based on the results, prices in the Hungarian capital have surpassed those in Warsaw, Bratislava and Zagreb, but are still far behind those in Vienna, Berlin and Prague. In terms of the intensity of increase, only the Czech capital has preceded Budapest.

Accordingly, in the period 2013-2021,

Budapest and Prague have seen the largest increase in house prices within the region, with prices per square metre doubling in both capitals.

Since 2019, the tendency of rising property prices has slightly stopped. This is partly due to the pandemic as well as the temporary reinstatement of VAT on new housing (from 5 to 27%). As the Hungarian news portal 24.hu reports, market participants should expect another rebound in 2021 as a whole, driven by the return of tax credits and the post-recession economic recovery. Nevertheless, the current average price per square metre of apartments in Budapest is still behind Vienna, Berlin and Prague. While this is a great benefit for homeowners, it can be a major difficulty for those looking for their first home.

The newly published survey also examined how property prices had changed in relation to net income. Accordingly, it has been revealed that the situation of those who would like to purchase their first home is difficult as property prices are also increasing relative to net income. In other words,

housing has also become more expensive relative to salaries.

This ratio for Hungary is 1.7, which means numerically that while salaries have increased by 32% over the period, prices per square metre have risen by 124%. Accordingly, the gap between income and house prices has widened remarkably, and only Germany recorded a larger change over the last decade. Consequently, the Budapest real estate market certainly does not favour young people who want to start a family and purchase their first home.

Nevertheless, the majority of Hungarians are less concerned than in many other countries. This can be accredited to the fact that 91.3% of the population in Hungary are homeowners which is an exceptionally high proportion in Europe.

As the Hungarian news portal Portfolio reports, the TOP 5 most expensive new apartments are located in Budapest’s 6th district at the Kodály Körönd. The luxury apartments of 220-260 m2 with balconies of 15-20 m2 are offered for EUR 2.1 – 2.5 million. The price per square metre is EUR 9,500. Similarly high prices can be observed in the Hárshegy34 residential complex in Budapest’s 2nd district. Here, a 250 m2 apartment is available for EUR 2.1 million. After the TOP 5, there is a gap in the price level. The next apartments on the list are offered for EUR 1.6 – 1.4 million, with prices per square metre in this range between EUR 7,600 – 10,600. These properties are mainly located in the 6th, 2nd, 13th and 9th districts of Budapest.