Széll Kálmán Square, Budapest, Hungary. Photo by Mihály Köles on Unsplash
Real estate prices have already started to decrease at the end of last year, and because of the coronavirus epidemic, demand is falling quickly not only for new but also for second-hand flats. This means that the Budapest real estate market, which had been skyrocketing in the past few years, reached a turning point.
According to Ingatlan.com and the Hungarian Central Statistical Office, there is a turn in the trends of the real estate market, Indexreported.
Ingatlan.com does not have data on the number of transactions in 2020 as of yet, but it will surely be lower than it was in 2018 or 2019. László Balogh from Ingatlan.com added that the sellers do not want to reduce their prices even though demand was falling already at the end of 2019 when the coronavirus epidemic has not shown up yet. Therefore, it will probably be inevitable to
lower the prices, particularly because the financial state of many potential purchasers will be much worse.
In 2014, the real estate boom of Budapest started in the inner districts because of the increasing demand of those who wanted to buy flats for investment purposes since the growing tourism created a need for short-term rentals and Airbnb. Moreover, the financial state of locals got better, so long-term rentals were also very popular then.
However, there are almost no tourists now, and many people lost their jobs in the last few months, because of which demand for flats started to decrease mostly in Budapest. Index says that these factors
will not affect real estate prices in towns in the countryside
because mostly workers and students rented flats long-term there, and they will remain on the market even after the epidemic and the economic crisis. This means that the price difference between flats in Budapest and countryside towns will diminish.
Mr Balogh said that there was a turn in trends in the Hungarian capital because, until the end of 2019, purchasers competed with each other for a good offer, but from now on, sellers will have to compete for potential buyers.