The effects of the rising utility costs can now be felt in the Hungarian housing market
The effects of the rising utility costs can now be felt in the housing market. It is natural that amidst an energy crisis, home buyers seek energetically good housing. This also means that a smaller property needs less maintenance, therefore, people look for smaller apartments. Considering the sudden rise in petrol prices, it is also probable that people want to move into the city where the infrastructure is more developed.
In the capital, people bought properties as investments in November, while in the countryside bigger houses were sought after — reports hvg.hu. Last month, about 8,000 properties were sold, according to the estimates of Duna House. The annual average number of transactions this year is about 125,000-127,000. Demand has fallen, but smaller apartments are still popular, especially on the Buda side. About 35 percent of transactions were about apartments, between 20-60 square metres.
Current trends
On the Buda side, the average price per square metre is between HUF 900,000-1,600,000 (EUR 2,200-3,900). In more than 50 percent of the transactions, the average price of a square metre was above 1 million forints or about 2,500 euros. The number of apartments sold, that cost more than HUF 70,000,000 (EUR 170,000), has been falling on the Buda side, while on the Pest side it has increased. This is most likely because the price per square metre on the Pest side is a lot cheaper, compared to the other side.
In the case of Budapest apartments, people mostly purchased properties for investment purposes. The average price of an investment was about HUF 61,200,000 (EUR 150,000). In the countryside, the usual motivation behind a purchase was to move to a larger house. In Budapest, most sales were made as homeowners sold their investment properties.
Change is on the horizon
According to mfor.hu, in the past two years, November was the first month when the number of renting and buying customers was equal. This signals the breaking point for the housing market. This means that only a few people are still capable of financing the purchase of a new property. The price per square metre in the capital has reached critical levels. The slowdown of the rapid price rise remained a dream this year too. Housing prices are still soaring and there is no sign of relief.
The high prices and the uncertain economic climate leads potential buyers to wait and rethink their decision. Even those who must move are rather renting apartments to wait out the uncertainties. The unaffordable mortgages do not help the situation either. If the trends continue and become widespread, it is very likely that property prices will fall sooner or later.
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Source: mfor.hu, hvg.hu