Do you want to buy an apartment in Hungary? This is your time!
The second wave of the Covid-19 epidemic is having a serious impact on the real estate market. On average, the price drop of newly-built flats sold by Otthon Centrum in September is approaching almost ten per cent, compared to the previous three months, reports 24.
The market hit is the panel building, as this can be the fastest-selling in the real estate market. Thanks to changing shopping habits, by September, the prices of new and used brick-built flats also fell compared to the previous three months. Newly-built homes have seen the biggest decline, with house prices falling by as much as 8.5 per cent on average.
Moreover, in the case of newly-built homes, the biggest difference is found between large cities and small settlements.
In Buda, as well as in the cities with county rights, there was a decline of around 10 per cent, while in the smaller cities, there was a price increase of more than 5 per cent. The largest price drop was in Budapest in the upscale District 13 and in the northern Buda district. There has been a decline of as much as over 10 per cent. In contrast, prices per square metre in the outer districts of the capital may have risen by as much as 10 per cent.
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The price of family houses has not moved much compared to the national average. However, there are also big differences between Budapest and the countryside. There was a 10-20 per cent price increase in Budapest while a 5-10 per cent decrease in smaller cities.
The panel buildings remain top-ranked properties,
as they are available to the masses. Due to demand, considering the national average, they had to pay 7 per cent more per square meter than in the previous three months. This can also be seen as a kind of price correction, as during the first wave of the epidemic, the price of this type of property fell the most.
In addition to property prices, the pandemic also changed the average time required to sell. In the case of panel flats, the rotation speed decreased by 10 days (currently 90 days), while in the case of detached houses, the time spent on the market decreased from 170 days to 166 days.
Budapest is an exception, as an average of 100 days is enough for a sale there.
The best bargaining position for buyers is in the case of detached houses. On average, sellers allow 9.5 per cent of the advertised price to drop from the announcement of the house to the selling contract.
The market could be affected in the short term by the government’s new home-building program. Based on this, in the case of constructions that will take place by the end of 2022, the VAT on housing construction will again be 5 per cent. This can help resume projects that were stopped at the beginning of the year. Second-hand flats are affected by another measure of the government, according to which families raising at least one child can reclaim half of the housing renovations started after 1 January 2021 (up to a maximum of HUF 3 million) from the state.
Source: 24.hu
Wait few more months of lockdown and closed borders and you can get the same flat at 50% less…..
Wait for few more months of Lockdoown and Closed Borders and you will get it at 50%….. plus the HUF singing as a brick and you will get nearly for free!
Don’t buy now. Just wait few more months and prices will be 50 percent cheaper. It seems Andras Balogh is living in a bubble and doesn’t understand the proportions of the current and future crisis.
I have been looking at the floorplans of some new builds in Budapest. It is not just the prices that are going down, so are the sizes. Many of them are not big enough to swing a cat in! The developers use the usual trick of tacking on a bit of balcony to make the total floor area seem bigger. The apartments that do have a reasonable indoor floor area seem to have as many rooms as possible crammed into them and most have what is euphemistically called a ‘Californian kitchen’ which is a fancy way of saying that it’s in the living room.
Paulus is correct.
The fabrication of advertised floor plans, size of apartments, and the lay out of the plans, needs extreme caution, when in the buyers market.
Noticeable, the quality of “fixtures and Fittings” – the work quality, in a vast number of cases, leaves a lot to be desired.
In my interest of the real estate property game, my unequivocal position and opinion remains, that Hungary, in these challenging and un-certain times we all live, prior to the on-set of this novel coronavirus, was top heavy, an over supply to the buyers demand and number, in properties for sale.
Prices prior to February 2020, in a position of over supply of properties for sale, which impacted in the rental aspect of property, had placed, the value of properties, the sales price, in an “top heavy” sellers market, outrageously unsustainable, at the high level and high growing numbers of properties that where advertised for sale.
Drive or walk, throughout the 23 Districts of Budapest, and you will see the on-going projects of the construction of housing.
Times we live, the catastrophic mess that we see Europe at this time, the global picture that could be termed a recession, extreme caution should be paid entering into the property market.
The speculators are holding onto their thick cheque books //
The global trend, is that property has declined from price levels, post February 2020.
Expectations, looking factorially at the big global picture and the place we call home, wherever that may be, the down side on property values, has a distance to fall before it “bottoms out” – a substantial downside to it.
We wait patiently, for a vaccine to be discovered that will immunize human beings from contacting and spreading this novel coronavirus that has engulfed the world – changed the World and our Style or Way of Life.
Stay Safe & Well – ALL.
#Gary: There is some merit in what you say, in that there is indeed an over supply of new builds (which have increasingly cheap fittings and fixtures) but the ones coming on stream (most, not all) are not in particularly good locations, usually in the rougher parts of their respective districts. With regard to the global trend, the UK has bucked that trend: in July the SDLT (Stamp Duty Land Tax) on the first 500,000 GBP (appx 200 million huf) was temporarily temporarily abolished until the end of March 2021, which has resulted in a property boom. Prices have risen at the fastest annual rate since 2016 – between 5 and 7% depending upon the geographical area.
Paulus, – You have made reference to the UK trend previous, which does surprise me.
Primrose Hill purchase 1973 – the “agony” what was paid, for a fully renovated in Gloucester Avenue.
Pit-tance compared to 2021 prices //
The “land down under” – Sydney & Melbourne property markets are flat and fallen off the top by 10% at this stage.
Big difference in their property game, compared to Hungary, as an example, is their shortage of housing, which has been a major influential factor, why housing prices, have for near on two decades, been on a rampant price up-ward trend.
Australia will, because their economy is reliant on the buoyancy, health of the property market, continue to experience, a downward trend in property values.
Australian has been blessed to a degree over the past (2) two decades not to have seen its property market, experience a reversed trend other than prices of property and land continue to rise.
This has in major part been through the under supply of housing, that has, and continues to be the situation in Australia.
It has been on an unsustainable up-ward trend motion, that had to be reversed to a level of economic normality.
The novel coronavirus – regrettable – has been the means of it adjusting, that hopefully, in time, it will find factorial correctness or economic rationality of its levels, and not, a disjointed pattern, that currently is the case of its property market levels.
Its like asking the question – who will win – the red caps or the blue caps in (9) nine days time ?
Blue has historically been the preferred baby colour for boys, and I will “punt” for that to be the case.
Col Porter musical of 1934 beautifully describes America – named – Anything Goes.
Stay Safe & Well.
According to this stat (https://www.statista.com/statistics/1130761/hungary-number-of-apartments-on-airbnb-in-budapest/) there were over 10,000 apartments for Airbnb in Budapest. I’m gonna guess that some are bought with mortgages and will either need to be rented quickly or sold. So over the next 6 months or so, these are all going to depress a market much further. A lot of the prices were geared towards foreign buyers, who obviously will be unable to come here during the pandemic. All in all, it’s a much needed correction as the market in flats was ridiculously high for native buyers.
#Gary: The average price now for a 1 bed (2 room) flat in Gloucester Ave NW1 (interesting that you say Primrose Hill, most say Camden Town) in a stucco period house conversion is around £800,000 (appx 320 million huf). So today’s buyer would only have to pay 5% Stamp Duty on £300,000, a fair old saving. Re the Australian market, I am in regular contact with a friend in Perth who keeps me abreast of his woes with his portfolio there!
Paulus,
My house in Regi posta utca – District V.
Concur – the outer Districts of the 23 – vibrant activity is evident in outer Districts of Budapest, that I visit.
The renovation of older buildings, converting to apartment type accommodation is evident.
Mixed into this growing concern I have, for the property market in Budapest, is the number of totally new complexes of apartment style housing, under construction.
In addition to apartment style housing, the number of new or refurbished Hotels, in District V, just my District, the end result, selling or marketing into a falling depressed market, not a good strategy.
Hotel Fontan, in Vaci utca/Regi posta utca corner closed and in November to be demolish and rebuild for upper apartment living and below restaurants/shops.
This is just (1) one example I give in my District V.
If we took a walk, probably, you would be mortified at what I showed you the numbers of apartment/hotel building in progress and renovations, in the District V.
Fields of Dream – 1989 sports fantasy field, that starred Kevin Costner.
Famous line from this movie :
“If you build it, they will come”.
Budapest, we know tourism, when normality to life returns, will bring numbers, but who and from where will numbers come to purchase these properties in an overly supplied housing/apartment market ?
Stay Safe & Well.
#Gary: an english friend of mine has a well known estate agency business here in Budapest (well known to expats and international buyers, not so much by locals – he does not have a shop front) and I recall him saying that Chinese buyers have moved up a notch. Previously they were buying a number of flats in the same building, now they want to the whole building…. he has an office in Beijing to facilitate that. They work on the same basis as more humble property owners such as myself who expect a 5 – 6% annual return (pre-tax) from the investment which is quite achievable in Budapest. Even for smaller investors, parking spaces in new builds with an underground garage are still quite a hot ticket if in the right location.
Paulus,
Near (9) nine months back, read article in Daily News Hungary, that reported what nationality in the past (12) twelve months say 2019, in Budapest, that had been the active buyers in the property market.
Top of the list was the Chinese from an international perspective, to a percentage of 18% and quite bit of day light to the nearest country who had made property investments in Budapest, Hungary.
Australia – Melbourne and Sydney – top of the list, the Chinese.
Hungary has to tread carefully as I have seen absolute “take over” of Districts in Australian from “open door” no limits to foreign investment in the property game.
The inner Melbourne area that once resembled a miniature Tilbury Docks, completely redeveloped for high rise residential apartment living, factorial cases of properties purchased, not lived in nor for rental accommodation but for reasons that financially benefit the titled owners, in the country of their residency.
My life, besides the mass benefits of a “generous” superannuation portfolio, has, benefitted from stock exchange dealings principally banking shares and property investment.
Quite, as the expression goes – “Elementary Mr. Watson ” – and both have been kind to me, and may they continue to be.
Stay Safe & Well.