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Home prices have soared far beyond PM Orbán’s promises: even panel flats in Budapest are becoming unaffordable
Budapest is rapidly heading towards a future where living in a panel flat feels like a luxury. According to Otthon Centrum (OC), prices in every district have risen by double digits, with some seeing increases of up to 45%—ironically, this applies to the cheapest housing estates in Kőbánya and Pesterzsébet. Experts expect the property market to pick up again in January, although momentum is already slowing this autumn.
Panel flat prices skyrocket
RTL News reports fierce competition even for panel flats in Budapest, as prices have surged to unimaginable levels. A homeowner from Kőbánya revealed that their flat, bought for 2.5 million HUF in 1996, could now fetch around 60 million HUF.
The price hike did not only explode after the pandemic; the past year alone has seen sharp rises. Many investors channelled their state bond returns and capital into property early this year, further fuelled by the government’s 3% low-interest loan scheme. OC data show a staggering 45% price increase in some districts (such as the 10th and 20th), with an average rise of 38% citywide.
- Jaw-dropping price rise concerning newly built homes in Budapest
Broken government promises
In June, Prime Minister Viktor Orbán promised that prices would not rise thanks to a square-metre price cap—but this measure has failed to deliver. Minister Gergely Gulyás had previously insisted that price increases would not exceed the assistance provided by the 3% loan, yet reality has proved otherwise.
Imagine that you saved enough for the down payment on a flat. You are ready to buy and then Fidesz brings in its’ 3% mortgage scheme for young home buyers. Prices subsequently go up and you can no longer afford to buy because your downpayment is no longer big enough. That is the situation that was explained to me about one family in Budapest.