Mission impossible?! – Property purchase in the Hungarian real estate market
In the first half of 2019, the average monthly net salary – not including allowances – was 719 EUR (~239,043 HUF). Still, salaries can vary significantly in the different regions of Hungary. Besides this factor, remarkable differences can be experienced in real estate prices as well. Despite the fact that the most expensive properties can be found in Budapest, some other cities also require harder work to obtain our dream home.
How long should I put aside to purchase a flat?
In this case, two important factors should be taken into consideration – besides income, the price of the chosen property is also a decisive factor. Not surprisingly, house prices also significantly vary in the different areas of the country.
According to the report of the Hungarian National Bank (MNB), in the first quarter of 2019, the highest real estate prices/m2 were experienced in Budapest. However, if income is also taken into consideration, we get unexpected results: in the capital, an average of 2.8 months work is required for 1 m2, while in Veszprém and Somogy counties, this value is even higher – an average income of 3.8 months and 3.7 months are needed.
This means that a 50 m2 apartment in Budapest can be purchased by an average of 11.6-year-long working period, while in Veszprém county, one should work 15.8 years to buy this flat – assuming the whole salary/month can be put aside for the purchase of the apartment.
The ideal amount of loan? And what is it enough for?
Currently, 70% of the purchase price is funded by the bank, which means that at least 30% of our savings should be utilised for the purchase.
Needless to say that the most expensive apartment – 87,815 EUR (~29.2 million HUF) – that could be purchased from the average salary can be found in Budapest. Still, the situation is even worse in Szabolcs-Szatmár-Bereg county where a 16 million HUF property could not be financed from the average salary. Meanwhile, in Győr-Moson-Sopron county, a 58 m2 apartment can be purchased – financed by a loan and our own savings.
Moving out of Budapest?!
As bankmonitor.hu reports, price differences in the cases of Budapest and Pest county might be deceiving. The majority of citizens think moving to the urban agglomeration is a good solution.
However, real estate prices in the vicinity of Budapest significantly exceed the average of Pest county – still not reaching apartment prices in Budapest – therefore, the financial benefits of rural housing are not as beneficial as one might expect.
Pest county has cheaper municipalities as well, but they are not in the direct vicinity of Budapest.
As it has been mentioned previously, 30% of our savings are substantial to realise a property purchase – 15-27 thousand EUR (~5-9 million HUF) – that cannot be raised by many Hungarians. However, private savings can be supplemented by the Family Home Discount (CSOK) or Baby-waiting loan. In Hungary, these funds provide additional support to realise the purchase of our dream home.
Source: bankmonitor.hu