The coronavirus epidemic had a significant effect on the Hungarian real estate market this year. The pace of price growth already slowed down last year, and in several places, prices even started to decrease. That means that there is a turning point in the real estate market in Hungary. Some experts talked about what they expect for 2021.
According to Portfolio, their prognosis regarding the Hungarian real estate market in March was accurate since they said that the decrease of real estate prices in Budapest would be around 7 pc. It seems that both the Central Bank of Hungary and the Hungarian Central Statistical Office calculate with that number. The big question is whether the trend of price decrease continues in 2021.
Portfolio concentrated on Budapest in this regard. They said that they did not expect a further decrease in the family house prices next year. Indeed, they said that the prices would increase by the end of 2021. In the case of apartment buildings, they expect a 1-2 pc decrease, which means that
rental prices will also fall until spring,
but they are going to rise again by the end of the year by 4-5 pc.
Experts say that the volume of sales in 2021 will be around 133 thousand, which will be lower than in the previous years. The government supported building new flats and houses in 2020. They reintroduced preferential VAT for building new apartments and included renovation in the extended family support program.
According to gazdasagportal.hu, OTP Ingatlanpont said that on average, one square metre in Hungary costs EUR 1,100, and if we exclude Budapest, this number decreases to EUR 781. That is because the average in the capital is EUR 1,768 per square metre.
Pest County is the most expensive in this regard among the counties, with EUR 1,113, and
Nógrád is the cheapest at only EUR 301.
In Békés, Heves, and Tolna counties, price increases are significant, around 20 and 27 pc. In the case of cities, apartments in Debrecen are currently the most expensive. Székesfehérvár, Veszprém, and Győr follow the Eastern-Hungarian city, all above EUR 1,096 per square metre. Meanwhile, in Salgótarján, this price still remained below EUR 340.
In Budapest, the downtown is the most expensive (District 5, EUR 2,580). Meanwhile, the cheapest is District 23, which is below EUR 1,096.
Source: portfolio.hu, gazdasagportal.hu
The on-going ramifications of the novel coronavirus – the “zenith” of the overall effect on the economy of Hungary, remains the question “shrouded” in great mystery and un-certainty.
Property market and rental market – top heavy of sellers when statistically evaluated against – buyers and renters pre February 2020 – markets – that had been sliding gaining momentum, in a downward trend, from early to mid 2019.
Sellers to Buyers – over supply of sellers.
Post February 2020 – evaporation of tourism, fledging economy, job losses, onset of winter months, economic deterioration in wider Europe and the United KIngdom and the World, just minor examples – why – the property and rental markets in Budapest, Hungary, will not see stabilization nor a positive upside for a time period of 12 to 18 months.
Do not disregard, and remain observant just look around you – new hotels near completion or under construction – who is going to sleep in there beds.
Statistically – in Budapest – over the past (2) two years – the BIG Three – property investors and purchasers are from the following countries :
(1) – Chinese.
(2) – Vietnamese.
(3) – Germans.
They ALL have gone into “sleep” mode and will not awake till such time, as there is strong European economic and Global stability.
The Budapest, Hungary “mean” decline in property and rental markets – from pre February 2020 values – will continue to decline between 16% and 22% -from the 2019 market “mean” values.
Over supply – calculated against insufficient numbers and activity of buyers – major factor why buying or investing into a property market – that is “plastic” – trending still downward in its performance – DANGEROUS.