The real estate market in the Hungarian capital has turned upside down due to the pandemic that was mainly reflected in the significant decline in rental prices. Surprisingly, however, the rise of purchase prices has only stopped as a result of the pandemic, without showing any drop in the majority of Budapest districts.
Last year, Budapest’s rental market declined, which can be explained by the significant decrease in demand due to online education, the lack of tourists and the introduction of the home office by most companies. This year, a slow recovery of the market can be experienced; however, rental prices are still lower than in the pre-covid period. The recovery could be further strengthened on Thursday when university enrolment points limits will be published.
Surprisingly, the rise in purchase prices has only stopped as a result of the pandemic, but we cannot talk about such a collapse as in the case of rents – reported by the Hungarian news portal Portfolio.
In Budapest, the average unit prices per square meter increased by 2.85%. In the downtown of the Hungarian capital, cheaper districts were characterised by a higher price increase.
Accordingly, prices in the outer parts of the 6th, 7th and the inner parts of the 8th and 13th district increased on average by 125% -140%, while in the city centre, the price increase was much lower, only 94%.
Nevertheless, the 5th district is still the most expensive in the Hungarian capital, where 2,590 EUR had to be paid per square meter in 2020. The second most expensive is the Corvin quarter with prices of almost EUR 2,500/m2, followed by the inner parts of the 6th district where an apartment could be bought for EUR 2,375/m2. The list continues with the inner parts of the 8th district, the outer parts of the 7th district, the 14th and 3rd districts of Budapest an apartment could be bought for less than 1,945 EUR/m2 in 2020.
Compared to previous years, the minimum time required to spend in a given apartment to match the cost of buying and renting has multiplied in several districts of Budapest based on the data in the first half of 2021. This is mainly due to significantly lower rents, while house prices continued to rise.
Accordingly, in the current situation, it is not worth buying an apartment in the Hungarian capital.
However, it is important to mention that this situation is temporary. Budapest’s real estate market is currently recovering from the economic crisis caused by the pandemic, and this is reflected in rising rents. However, we still do not know whether a possible fourth wave of coronavirus will bring back the conditions experienced last year that might result in a further drop.