Skyrocketing prices in Budapest’s new homes market
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New homes market in Budapest shows quite a varied picture – even though housing construction showed a significant slowdown in the previous months, this declining trend is still not reflected in the prices. In the Hungarian capital, the specific average price of newly built residential properties is already over EUR 2,740 (~HUF 950,000), while in the Buda districts the average price per square meter is close to EUR 3,170 (~HUF 1.1 million).
Housing construction dropped significantly at the beginning of the year, which can be explained by three main reasons:
- the abolition of the discounted 5% housing VAT;
- the strict building energy requirements valid from next January;
- the coronavirus epidemic reached Hungary this March.
As a result, in the first two months of the year, building permits were issued for 1,510 residential properties, which means 29% decline on an annual basis.
The number of permits issued for the construction of single-family houses decreased by 25%, while in the case of multi-apartment residential buildings, a 38% drop was experienced.
As Pénzcentrum reports, it is not yet possible to give a specific housing market forecast for this year. The Hungarian news portal found that the average territory of a newly built flat for sale in Budapest is 70.6 m2 that costs EUR 2,750 (~HUF 952,431) per square meter.
On closer inspection, housing market indicators can produce quite drastic fluctuations. For example, in relation to Buda and Pest, it can be seen that the Danube is a serious watershed in terms of price, which means a price difference of almost EUR 460 (~HUF 160,000) per square meter.