High inflation has led to an unusual result in the Hungarian property market

High inflation is also affecting the Hungarian property market. As a result, the market has slowed down as real estate is no longer such a good investment.

Cross-national trends in Hungary

With inflation falling, government bond yields have also risen, so property in Hungary is no longer such a good investment. For this reason, many people are holding off on buying a home.

“The real estate market has slowed down and is less attractive compared to inflation and even to the interest rates available on the residential government bond market,” writes Novekedes.hu. The portal reports that there will be a serious downturn in the coming year due to inflation, high home loan interest rates and the threat of recession.

Prices are also falling in Great Britain and Germany, the biggest property markets. Again, the reasons include high inflation and rapidly rising interest rates.

The property market is taking a downturn

“All the existing negative phenomena (less borrowing, stagnating prices, lower number of transactions) have already surfaced, but market players still think there is reason for optimism,” the portal writes.

These trends were confirmed by several real estate agencies. In April, Otthon Centrum reported that the rise in prices per square metre had slowed down due to the fall in demand. At the same time, the number of construction projects has also fallen, napi.hu reports.

According to Duna House, there was also a downturn in the Hungarian real estate market in the spring. In April, for example, a third fewer homes changed hands than in 2022. Furthermore, far fewer mortgage loans for housing were closed. Ingatlan.com added that the proportion of people buying with a loan also fell significantly.

Caution has always been a feature of difficult economic times, so this is no surprise. Market players are therefore right to wait it out, but Hungarian real estate market participants remain optimistic.