Housing market: High costs in Hungarian cities make smaller towns and cities abroad more appealing
Budapest is considered one of the less affordable cities, according to the central bank’s comparison of the housing market. The dynamic growth of housing prices in Central and Eastern Europe over the past 4-5 years has narrowed the previously significant gap in price levels between the more developed regions of Europe and the rapidly developing Central and Eastern European countries, writes Pénzcentrum.
Although internal migration is relatively uncommon among Hungarians, it is still feasible to relocate to another part of the country for a job with better opportunities, education, healthcare, or family reasons.
The latest data from the Hungarian Central Statistical Office (KSH) shows that the majority of the population, 38%, resides in the eastern part of the country. Meanwhile, 32% live in the capital, Budapest, and Pest County, and only 30% of the country’s total population lives in the western part, known as Transdanubia. According to the 2022 census, the most populous of the nine county seats in the Transdanubian region is Pécs, with a population of 139,000. However, the population of all county seats has decreased since the 2011 census.
Despite the slightly reduced popularity of suburban areas around larger cities, which offer more space and natural surroundings, these areas remain highly sought after by families looking for a home. This trend partly explains the declining population in some county seats, according to Károly Benedikt, Head of PR and Analysis at Duna House. For example, Győr, which has the second-largest population (127,000), experienced the smallest decrease in permanent residents, at just 1.5%.
Housing affordability remains a challenge in Hungary, but renting in Budapest is cheaper than in many other regional capitals. While few new homes are being built in Hungary, they are still cheaper than those in Prague or Bratislava, according to a new housing market study.
Housing affordability in Hungary has not changed significantly since 2022, with wages in Hungary meaning that property remains expensive compared to other countries, as noted in the Deloitte Property Index 2024, published on Monday (read more in THIS article).
It is often cheaper to buy a home abroad than in the Hungarian cities’ housing market
Among the capital cities, Budapest ranks in the middle in terms of affordability, even though affordability slightly worsened from 2022 to 2023. “Looking at the housing market in 2023, for instance, the average price per square meter of new housing in Italy (EUR 2,118) was lower than in all four Visegrad countries. However, in Italy, second-hand housing is already cheaper than second-hand housing in the Czech Republic, Slovakia, and Poland,” said Gábor Kohári, a real estate consultancy expert at Deloitte Hungary.
According to G7, this trend is evident in the data: in Budapest last year, the average salary required 10.4 years of savings to buy a new 70-square-meter apartment, while the national average was 10.2 years. Hungary built the fourth fewest dwellings per 1,000 inhabitants among the 24 countries surveyed last year, a trend expected to continue in 2023, as it did in 2022.
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