Hungarian real estate market – This is expected in the post-covid period
As a result of the pandemic, the Hungarian real estate market has undergone several changes like dropping real estate prices and the realignment of the previously profitable property investments. Let’s see what this means in European comparison and what can be expected in the near and distant future.
In 2020, home prices in European countries continued to increase. According to the housing market price index of Eurostat, in spite of the coronavirus, price increases were observed in the majority of European countries.
During the last quarter of 2020, only the Spanish and Hungarian housing market indices decreased by 0.8% and 1.4%.
As the Hungarian news portal Portfolio reports, the most significant price increase could be observed in Luxembourg (4.7%) and Cyprus, where the rapid rise in prices was a correction of a similar decline. They were followed by Lithuania and Estonia, where the price increase was almost 4% by the end of 2020.
Just like most European countries, Hungary has also started to ease the pandemic restrictions – restaurants, cinemas, theatres, gym, and other services have reopened; however, for the return of foreign tourists, we still have to wait a bit.
The revival of tourism can significantly impact property prices which may also affect the downtown of Budapest and the real estate market of the party district. According to the expert, after the pandemic, many people may choose places far from the crowds and cities as their travel destinations, and the demand for semi-natural locations will increase.
Accordingly, short-term properties providing the opportunity of isolation might gain more popularity in the future.
One of the biggest questions is whether the former image of the party district of Budapest and the function of the entertainment centre will manage to revive or transformed in the long run, which may also affect the development of demand for the previously booming Airbnb services.
The district-level regulation of short-term rentals already started in 2019, but it temporarily stopped with the outbreak of the pandemia. So far, the framework of the regulation was completed only in the 6th district of Budapest.
In addition to tourism, the housing preferences might also change.
By taking advantage of the currently available subsidies, buyers will prefer to build larger, family-friendly apartments in the city’s centre rather than small apartments for short-term rentals.
The cyclical nature of the real estate market in home choice preferences can be observed in Hungary since the 1990s. At that time, the expansion of the agglomeration was replaced by high-quality investments and developments in the 2000s, mainly in the 6th, 7th, 8th, 9th and 13th districts of Budapest. As a result, high-quality newly built properties appeared in the inner districts of Budapest, becoming more attractive to live in the city centre than before.
The end of this period was 2017-18 when – due to the costly housing prices in the downtown – the age of the suburbs and the agglomeration began, which was further intensified by the coronavirus. However, it might happen that in 10-15 years at the latest, the city centre may once again become the leading destination for home buyers.
According to the Hungarian news portal Világgazdaság, it can be observed that nowadays, the suburbs are becoming more expensive, and the margin is declining between the suburbs and the city centre. However, the demand for real estates in downtown might increase again in the future.
As a result of the pandemic, rental prices have fallen significantly; however, according to the latest data, a slight increase can be observed compared to the December drop. Still, likely, the previously skyrocketing prices of the Hungarian real estate market will not return soon.
According to the expert, the upcoming summer will answer several questions regarding the real estate market development.
4 Comments
The Real Estate Market – the escalations witnessed in Hungary over the past (5) five years – driven to the levels pre February 2021 by Foreign Investors, will see by numbers of old and over supply of new apartments prices listed for sale or rental – continual to DECREASE.
Supply versus Demand – in an Economy of rising unemployment and Inflation, the weakening devaluation of the huf, that has seen Hungary – shattered and politically economically destabilized, by the severity and the on-going ramifications caused by the novel coronavirus.
Foreign – Encouraged and Assisted Investment into the Property Market of Hungary – housing, apartments and warehouses – 1996 to 2021 – the disproportion increases witnessed across the landscape of the property market it must nor be FORGOTTEN bought on by Foreign Investors.
The Foreign Investors in order were :
(1) – Chinese.
(2) – Vietnamese.
(3) – Germany.
Enough is Enough – our land – our country and a Government that MUST undertake greater creativity in it’s thinking to enable HUNGARIANS – given every opportunity and assistance – to purchase Property.
Property values, the Falseness escalated values driven to levels STILL witnessed to-day by Foreign Investors, must be Controlled by Government.
Hungarians – first choice and first encouraged and assisted – by GOVERNMENT – to purchase property that sees a reversal away from Foreign Investment pulling “rank & file” given Preference and Priority – over HUNGARIAN Citizens especially the future of Hungary being the young first home apartment buyers.
National Elections May 2022 – what in broader policies by ALL political parties – WHAT are YOU going to do and OFFER – that will allow the youth in particular to PURCHASE a PROPERTY.
Hungarians – First, our soil our lands our FUTURE.
There are plenty of ways first time buyers can helped. In other countries there are shared ownership schemes (you buy a percentage of a property, the rest is owned by a Housing Association but buyers can buy further increments over time up to 100%), Government backed loan schemes, Keyworker ‘affordable properties’, Planning Gain incorporated into planning permission (developers have to provide a number of low cost homes for 1st time buyers in addition to luxury flats) and so forth. But the biggest obstacle for first time buyers in Hungary is the very high deposit required by banks before they give a mortgage, typically 30%. In the UK for instance, the normal at present is 10%, but some lenders accept 5% and there are schemes that offer a 100% insurance backed mortgage. In my view it is the banks that are making life difficult as well as the planning system being unimaginative and the government schemes being too restrictive – why should a young couple have children to qualify for government schemes? Often people want a home first and children later, which is common sense.
i have a feeling that there are some big players in the real estate market and its in their best interest to keep the prices high for a bit longer. I also suspect that the government might be lobbied by this players.
All and all, paying 1 mil per sqm for a “garbage” matchbox apartment that requires missive renovation is hard to explain, yet no one can explain why we are here.
But this situation will autocorrect once there are no more buyers willing to pay so much for so little.
Hungary real-estate is a lose cannon , a pig on LSD that is out of controlled for the last 5 years; waiting for the implosion.
But i agree with the comment above, should be harder for foreigners to turn real-estate into their gain, this affects the local people, the young people , people who are looking for a home and not to make money.
Tax people\corporation with multiple properties, they are the reason the prices are so high.
Imagination – elevating an Economy – moving it forward into the 21st century – that sadly is still operating functioning heavily under pre 1989 – Ideas and Philosophies.
Commentators = ALL – are making constructive recommendations and giving explanations of – WHY – we need in Hungary to use Imagination.
The next stage of our Economic Planning and on-going – DEVELOPEMENT – the 21st century and future of Hungary – lessons learnt the “sinking” and “eradication” of the – WRONGS – that in effect, over the past (10) ten years, introduced by the present Government, have not in large part, been for the taking of Hungary into the 21st century.
Social Inequality – just ask yourself this question – is it less in 2021 than in 2010 ?
My answer – NO.
In the category’s that define and make up a country’s population – Structurally – within these category’s – it is my opinion, that we in Hungary, have seen and continue to see – “grave” widening – that is defined as – Social Inequality.
National Elections in May 2022 – what an – OPPORTUNITY – for new 21st century innovative Economic Planning and Development.
Have the Big 6 – the “smiling” presently – Opposition – have they – Seen the Light – the need of Big Steps of Change – moving forward – out of pre 1989 – Ideas and Political Philosophies, in particular, the past (10) ten years of this present Government – that has “deepened” what is Social Inequality.
Imagination and Creativeness – the “smiling” at present Big Six – a concentrated Focus on keeping the young – what ever “station in life” they are from – Interested and Motivated – seeing a Future – to live their lives in Hungary and not desert nor abandon their homeland through lack of OPPORTUNITIES.
This platform has been used prior, that the Big Six – “smiling” at present – would be Foolish not to look at Australia and Canada – the functionality and ALL benefits that SUPERANNUATION make to a country – its Future and life style and quality of life to citizens.
Interesting and Challenging on-going times we live in Hungary – but what a time to “sink” and “bury” – propel itself out of pre 1989 and last (10) ten years of Government into the 21st century and beyond.
History – it’s Education to US – an expression used – valid muchly to Hungary – the citizens of Hungary to-day – ALL 9.6 million of US – that history teaches us :
” the farther back you can look,
the further forward you are likely to see.”
Winston Spencer. Churchill.