Hungarian real estate prices could peak – Will the bubble burst?
Over the past few years, real estate prices have shown quite a significant increase in the capital and in cities with county rights. In addition, due to the pandemic, more and more people are trying to move to more rural areas, but the number of relocations within the capital has also grown. How do the prices fair right now?
Soaring prices
According to Portfolio, the prices, compared to the 2020 all-year average, have continued to go up, especially in cities with county rights. This was true for Budapest as well, however, to a lesser degree.
OTP’s data suggests that the increase in prices in cities with county rights was between 12-15%, while the price increase in Budapest was 5%.
Interestingly, one of the cities where the prices have grown the most was Salgótarján. According to the data, the increase was 32%.
Portfolio also writes that there are currently five districts in Budapest that seem to have decreasing prices. These are districts XX, XXII, VII, XI, and XXI.
They highlighted that if the price decrease holds out even after the remaining data are processed, it would be the first time since 2014 that real estate prices in a Budapest district have decreased.
read also: Things to consider when buying real estate in Budapest
In the real estate market, a turning point could happen at any moment, and the bubble could burst. Retrospectively, Portfolio writes that, following the 2006 peak on the real estate market, approximately 7-8 years of a decreasing period followed.
After reaching the bottom, a similarly long increasing era followed – although much steeper this time – until 2019-2020.
It seems that this increase could reach a peak soon.
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New apartment market
But what if you exclusively want a new home? In that case, Portfolio has gathered data on how the prices of new homes have changed in the past three months in Budapest.
Early bird gets the worm, as the saying goes, and it is definitely applicable for the current real estate market. Data shows a staggering increase in prices since the summer.
Portfolio writes that the average price of new apartments in Budapest is around 76.1 million forints or roughly 211,400 euros. This is a shocking increase of 6.1 million forints (~€17,000) in just a few months.
Some of the reasons for this steep price increase might be the consistently high demand and the introduction of “green” loans.
Although further increases seem to be the trend, there were some 200 apartments where the prices decreased over the last three months.
Source: Portfolio.hu