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.
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Source: Portfolio.hu
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The Hungarian Economy continues to “trend” in a downward inclination.
The “Core” indicators that are the measuring stick, to access the Economic & Financial performance of a country, for Hungary, they ALL are heading in a direction, that are CONCERNING.
(1) – Trade Deficit – over past 4 months continues.
(2) – Forint – continues de-valuation against the major european / global currencies.
(3) – Inflation – at highest leval in 14 years and will INCREASE.
(4) – Interest Rates – over past 4 months increased and will continue to RISE.
(5) – Employment figures – increases in past 4-6 months – will through WEAKNESS of the Economy Soften/Decline
(6) – Un-Employment – numbers – will increase – DUE – to allround pressures on the Economy.
(7) – Rising Government Debt – in there effort to “Hold” the Economy to-gether, through Borrowing – receiving No European Union Funding, due to the on-going ARGUEMENT – the Governments next – Plan of Attack, besides already announced Project cut backs – what is there NEXT – measure to Hold the Economy to-gether ???
The Govenor of Hungary’s Central Bank – Gyorgy Matolcsy – spoken openingly of Hungary’s need to “rebalance and restructure internally” – the present direction and Economic Financial Platform, set on – by the present Government.
Is the mesage of Gyorgy Matolcsy – to the Government – Stop Spending – otherwise we are looking at a worsening Economic Financial Picture – than what presently – we are seeing occurring in Hungary ?
The BUBBLE – has commenced in the Landscape of the Property Market in Budapest, Hungary – which WILL result in prices – in probability – lower by 8% to 12% – from there present “mean” level.
Sellers – override – smother – BUYERS.
We Build on – new apartments, flats, renovation of the old houses, flats apartments, inclusive of – new warehousing estates for Storage – and BUILD on – New Hotels.
We Build on – worsening an already oversupplied SELLERS market – that is SHROUDED/Covered & surrouded – in a seriously – weakening Hungarian Economy.
The Chinese, Vietnamese & the Germans – are NOT buying – and these (3) countries – in the order written, through there buying/purchasing power – Foreign Investment – the principal catalyst – and Reason – WHY – the leval of Property Values – in Budapest, Hungary – have reached these “above the clouds” prices.
The “Core” – Economic & Financial Indicators internally within Hungary – the wider European Union Member Countries, Great Britain inclusive of the U.S.A. & China – this is the WIDER Picture of the World – that Hungary needs to pay extreme close attention, as to – what is Happening in there Economys.
Vulnerability – Uncertainty – through the arrival post February 2020 – the Economic & Financial Markets of the World – have CHANGED.
This change – the “ebbing & flowing” – underpinned by Uncertainty within the Global World – we will witness for the next 2-4 years – as the process of realignment – GOES on – of Global Economic & Financial Markets – evidenced signs – of the Global Economic & Financial Markets – discovering / finding – through the cataclysmic effects of this ongoing novel virus – the NEW Core – of what purpose they play – to the FUNCTIONALITY – in the Global Economic & Financial Markets.
The World – post February 2020 – has CHANGED and vital Core Ingredients of the World – Economics & Financial Management by Countries – has NEEDED to Change – being part of the Global Economic & Finacial Landscape.
Challenging & ongoing interesting time we live in Hungary & Globally but the World has changed and we must change with it – to our way of life and comfort sustainable on-going for our future existance.
Almost word for word the same article that the DNH has run for about 3 years, several times each year. Yawn!