Prices in the Hungarian property market showed a considerable increase in the last few years. That trend seemed to be unbreakable. However, COVID and the ongoing war in Russia, hand in hand with the brutal high Hungarian inflation and the decreasing forint value, resulted in a significant change. Here are the details.
According to telex.hu, the price rise stopped in Hungary’s real estate sector. Furthermore, in some house types, prices started to fall. For example, in Budapest, we may find brick apartments for a 3.5 percent lower price than last December. In the case of the blocks of flats, the rate of price decrease reaches 2.5 percent.
Based on a new analysis of Otthon Centrum, in 2022, prices grew concerning all real estate types compared to the 2021 average. That trend stopped in the second half of last year, and the intensity of the price increase declined. In Q4 of 2022, Otthon Centrum noted price reductions in some places. The national average price of permanently-occupied apartments decreased by 4 percent, while in the case of houses, that rate was 5 percent compared to Q3 of 2022.
The trend change reached even Budapest. The trend affects the prices of apartments instead of houses. In the case of permanently-occupied brick apartments, the prices went down by 3.5 percent. That rate was 2.5 percent considering blocks of flats.
Brick apartments in Budapest were sold for an average square metre price reaching HUF 963 thousand (EUR 2,446) in the last three months of 2022. The 5th district of Budapest remained the most expensive in Budapest, where the average price for a square metre is above HUF 1.2 million (EUR 3,050). The downtown district is followed by the 2nd and the 3rd districts with HUF 1.12 million. The square metre price is above HUF 1 million in the 11th, 12th and 13th districts.
The brick apartment market also changed significantly in 2022. In that case, the average square metre price was HUF 743 thousand in Q4. That is 2.5 percent lower than in Q4 2021. In that regard, the 13th district is the most expensive with HUF 928 thousand (EUR 2,357) per square metre. The second place went to the 11th district, while the third went to the 14th district, Zugló.
The average square metre price of the family houses was HUF 739 thousand (EUR 1877) by end 2022. That is a 23 percent price increase compared to the previous year. Numbers show that, in Budapest, demand decreased for non-new family houses. The 2nd and the 12th district, the average square metre price grew to HUF 1 million (EUR 2,540).
Buyers wait for good deals in Hungary. That is why the number of transactions decreased by 40-50 percent in the last few months, Balla Ingatlan told MTI, the Hungarian News Agency. That is because of the rising interest rates and energy prices. The former is causing a significant loss in the Hungarian real estate market since, in some areas, the rate of real estate bought from loans reached 50 percent. Energy efficiency is now a keyword. Energy inefficient houses and apartments can only be sold for a 20 percent discount.
In the market of new properties, a 20-30 percent price rise was typical in the last few years. That trend will probably not change because of the increasing material and labour force costs. As a result, fewer newly built properties are on the market.