After a period of rapid price growth, Hungary’s residential property market is showing clear signs of cooling, particularly in the once-booming panel flat segment. New data from property portal Zenga suggest that sellers are increasingly being forced to lower asking prices during the advertising period simply to attract potential buyers.

Panel flat boom seems to be over

Just over a year ago, strong demand allowed many homeowners to raise their asking prices above their original expectations. Today, however, the situation has reversed. According to Zenga’s latest market analysis, owners of panel flats are now cutting prices by an average of 3.5% before serious interest emerges. By comparison, at the beginning of last year, sellers were still able to increase prices by around 2% on average.

Property market analyst Péter Futó of Zenga said that price reductions during the advertising period are an important indicator of changing market conditions. They suggest that a growing gap has emerged between sellers’ expectations and what buyers are actually willing or able to pay.

Demand falls across the market

The slowdown is not limited to panel flats. During May, sellers of brick-built apartments and family houses also had to reduce asking prices by roughly 4% on average before attracting buyers. However, the decline in demand has been particularly severe in the apartment market. While demand for family houses was only 11% below last year’s average in April, demand dropped by 42% for brick-built flats and by 46% for panel apartments.

This comes after an extraordinary surge in prices during 2024. In several Budapest districts and major Hungarian cities, panel flats recorded annual price increases exceeding 30%, making them one of the strongest-performing segments of the housing market.

Rising supply adds pressure

At the same time, the number of available properties has increased significantly. While the supply of family houses has remained largely unchanged, listings for brick-built apartments have risen by 19%, and the number of panel flats on the market has jumped by 67% compared with an average month last year.

In Budapest, panel flats are currently advertised at an average price of HUF 1.28 million (around EUR 3565) per square metre. In District XI, Újbuda, the average reaches HUF 1.55 million (EUR 4317), while in District XIII it stands at around HUF 1.44 million (EUR 4011). These prices are increasingly exceeding what many buyers consider affordable and, in some cases, surpass the upper price thresholds linked to the government-backed Home Start housing scheme.

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Correction rather than a full collapse

Despite the slowdown, analysts do not expect a major fall in nominal property prices. Market experts argue that the recent cooling represents a correction following the sharp price increases that occurred after the announcement and launch of the Home Start programme.

Rather than a dramatic drop in values, the market is likely to experience a period of stabilisation, during which wage growth gradually catches up with housing costs. For now, however, sellers who adapt more quickly to changing market realities may have the best chance of securing a sale.

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