2020 brought fundamental changes to the real estate market in Hungary, which are the results of not only the global pandemic but also several other factors. Let’s see how these affected real estate prices and trends.
The real estate market already started to slow down in 2019, and the COVID-19 pandemic that struck in 2020 just put a cherry on top, Forbes reports based on a survey by ingatlan.com.
Demand dropped by 40-50% during the first wave, and it more or less normalised by autumn. Real estate prices dropped everywhere from the capital to smaller cities and towns all over the country – a trend which Daily News Hungary already reported about. Please see our previous pieces on the topic.
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On average, m2 prices have decreased by 5.8% in Budapest and by 6.4% in the countryside in 2020. Interestingly, prices went up by 4.2% in the county seats, where the average m2 price is now approximately EUR 1,065 (379,000 Ft).
The average m2 price in Budapest was EUR 2,000 (722,000 Ft) in February 2020, and it dropped to EUR 1,915 (681,000 Ft) by December 2020.
Since foreign tourists disappeared, there was little to no need for short-term rentals in downtown Budapest, which led to a drastic drop in rentals. This is the opposite trend to what was observed in 2019, the so-called “Airbnb effect,” which helped push rent prices up a year ago, and now it achieved the opposite.
Decreasing rental prices was the set trend by the end of autumn 2020. This affected real estate purchases for investment since it was no longer a good deal to buy to rent. Therefore, the market was ruled by home buyers this year.
What to expect next?
Experts say that extreme fluctuations are not to be expected. The real estate market has reached certain stability. They also predict a boom for 2021 thanks to the various state housing aid programs that have been introduced.
Source: Forbes.hu; Ingatlan.com