By the end of 2022, the slowdown of the Hungarian housing market intensified. However, the spring months will really show what direction the real estate will take after the stagnation.
The combined housing market price index of the Central Statistical Office has decreased
For the first time in a long time, the combined housing market price index of the Central Statistical Office decreased in the last quarter of 2022. The already processed sales and purchase data showed 256.2 percent for October-December, falling short of the peak of 261.4 percent in July-September. This means that an average apartment could be bought for more than two and a half times as much at the end of last year as in 2015.
If we want to understand the 2 percent price drop between quarters, we have to look at the two submarkets separately, writes Pénzcentrum. The net price change of newly built apartments kept their prices during this period. However, in the second-hand housing market, prices fell by 2.3 percent between the two quarters.
New trend in the real estate market to come?
According to Dávid Valkó, the leading analyst of OTP Ingatlanpont, in the forty quarters of the last 10 years, the second-hand housing index decreased five times more compared to the previous three months. But he also adds that there have not been two such negative quarters in a decade. Not even during Covid, i.e. after every price drop, there was a correction of some size. However, in the current situation, this trend may break. Although there are still many uncertainty factors, Dávid Valkó calculates that a drastic price drop in Hungary is not expected in the next quarterly report either.
There is no significant price reduction in case of new apartments
The situation is clearer in the case of new apartments. For now, no significant price drop should be expected. Compared to the fourth quarter of 2021, the price of used apartments increased by 17.1 percent by the end of last year. “This, which we already thought was a noticeable slowdown, is the seventh largest nominal price increase in the last twenty quarters,” recalls Dávid Valkó. In the case of new constructions, the annual price increase is slightly more modest, 13.1 percent. At the same time, both market segments became cheaper in real terms by the end of 2022 as annual inflation reached 24.5 percent in December.