real estate

The real estate market in Hungary has ground to a 10-year low

Property Budapest

The Hungarian real estate market has seen its weakest first quarter in 2023 in 10 years. The high prices and interest rates as well as the skyrocketing inflation mean that neither buyers nor sellers are willing to make compromises.

The Hungarian real estate market has not seen this low demand and number of interactions in the last 10 years. Index.hu reached out to real estate experts to get a better idea of what could people expect in the near future. According to Ákos Balla, owner of Balla real estate, in some cases, demand has fallen by more than 50 percent for certain types of property. This was no exception for well-located properties.

Otthon Centrum has also spotted trend. According to their data, sales of both used and new types of properties have been halved in the first three months of 2022. The interest rates and high inflation creates a standstill in the housing market. “Everyone is in the wait-and-watch mode: buyers are hoping for better loan structure and prices, and sellers do not feel the need to rush to sell their property at a lower price” – an expert of Otthon Centrum told index.hu. As we have previously written, the stagnating real estate market is driving the prices up in the rental market, and the experts at Otthon Centrum believe that this trend is set to continue.

Lack of new homes

The fact that fewer people are taking out loans is most evident in the new home market. As the prices of new homes reached their peak, the lowered demand slowed down house-building projects as well, therefore the supply lowered at the same rate as demand.

“Investors need to cut prices, and those who do so can expect buyers. Those who fail to do so will see their projects slow down, and as a result, new ones will either not start or start late” – said Ákos Balla, who mentioned that despite the stagnation, the housing market won’t collapse due to the convergence of supply and demand.

Read also: Time to haggle: the reasons why you can save big on a home purchase in Hungary

Unexpectedly, the property market started to boom again in Hungary

Budapest property market

Hungary’s real estate market unexpectedly began to flourish again. Based on the data of the Duna House, a Hungarian real estate agency, March saw a 25 percent surge in property sales numbers. Daily, 250 flats and houses exchange owners in the country.

According to Világgazdaság, prices began to decrease while more families are trying to buy a property with the help of the different government allocations. It seems the buyers are returning to the Hungarian real estate market. In Budapest, average property prices stood at HUF 50.7 million (EUR 136,000) last month.

In March, there were 7,787 sales in Hungary, based on the recent analysis of the Duna House. That is a 25 percent rise compared to February, and March became the best month in Q1. However, if we take a look into the situation from a broader perspective, we can state that the Q1 of 2023, bringing 19,893 sales, is still the weakest quarter in the last ten years.

More buyers on the property market

The last time that figure stood lower was in 2013, Duna House added. Anyway, the real estate agency calculates an increase in transactions for Q2 in 2023. They said lower prices arrived on the market, and the trend concerns even the nominal and real value. Prices are not as stable as they were before. As a result, many buyers realised they could negotiate and buy real estate cheaper than their advertisement price.

The negotiation rate varies, but generally, it is between 4 and 9 percent, which is considerable.

Those looking for investment would like to buy 54 square metres on average in Budapest and would pay HUF 50.7 million (EUR 136,000). 43 percent of the sales in Budapest fell into that category in March. But people search for newly-built properties as well. The average price per square metre went above HUF 1 million (EUR 2,676) in 15 districts. The most expensive district was the Buda Castle (1st district), with HUF 2.6 million/sqm (EUR 7,000). Meanwhile, the 13th, 9th and 11th districts had the biggest offer of newly-built projects in Q1. However, based on bank data, people would not like to take up loans to buy property. The rate of such financial transactions fell by 67 percent compared to 2022 Q1.

Experts expect positive changes in Hungary’s real estate market in the coming months. Based on the data of Creditpass, more families accept government-helped CSOK (housing subsidy for families) loans, and people became financially more conscious due to the high interest rates.

Read also:

Time to haggle: the reasons why you can save big on a home purchase in Hungary

Purchasing a home is still a large investment in Hungary, but there are several reasons why buyers can spare millions of forints (tens of thousands of euros) if they bargain successfully with sellers in the Hungarian housing market.

Property prices have been stagnating in Hungary in the last couple of months. Due to the high inflation prices have reached their peak, but buyers cannot enter the market just yet as interest rates remain high as well. But as László Balogh, ingatlan.com’s chief economist points out to rtl.hu, buyers have a good tool in their pocket to considerably lower asking prices.

Shifting priorities in the housing market

As we have previously written, prices in the real estate market have started to stagnate and even lower in some cases, both in Budapest and in the Hungarian countryside.

According to László Balogh, even small changes – like how the square metre price fell by 1.7 percent in Budapest’s popular district XIII– could lead buyers to spare millions of forints compared to previous months.

But the price scissors could grow further in the following months, as due to the utility crisis homes with high utility bills or buildings that are due for renovation became much less desirable. Therefore, buyers should be able to bargain from the asking price.

“Sustainability and energy efficiency have become an important factor for buyers because they are not only considering how much a property costs and how much credit they have to take out, but also how much they have to spend on its upkeep” – László Balogh said.

“There is a growing disparity in monthly maintenance costs. Demand for properties with poor energy performance has fallen more and they have lost more in price. Properties in better condition, more energy efficient and with lower utility bills are now doing better on the market.”

“It is no longer uncommon for buyers to be able to get a bargain of up to 10-15 percent for properties that are in low demand because, for example, they have a very large floor area, are not insulated well, and have extremely high energy consumption.”

The economist also mentions that due to high-interest rates demand has fallen drastically in the past months, and the low number of transactions is keeping the prices in check for the time being.

Properties for sale in Budapest from the city administration!

Budapest property real estate market housing

The capital city is offering sixty-one properties for sale. Budapest expects to generate a gross revenue of HUF 18 billion (EUR 47.8 million) from their sale.

Properties for sale in Budapest

Budapest’s deputy mayor told Népszava that they have no other choice than to sell these properties. They are “operating in survival mode” and therefore they have to use all means to maintain solvency.

The following properties are also being put up for sale by the Budapest Municipal Property Management Centre Zrt.: District II villas, a pump house, a rural social home, the former Kispest culture house and the Kőbánya shooting range.

Ambrus Kiss, Deputy Mayor for Economic Affairs, gave the following reasons for the sale to Népszava: These buildings in their present state only take money, while the Municipality of Budapest has long had no reserves.

According to them, the revenue should be used to run public services.

However, Zsolt Wintermantel, the leader of the Fidesz parliamentary group in the capital, sees it differently. He says it is unjust that public property is being sold off so that buses can fill up with petrol.

Budapest drinking water network to be upgraded with EU support

The drinking water network of Budapest will be upgraded using HUF 20 billion (EUR 53 million) in financing from the European Union, the deputy mayor in charge of city operations said on Wednesday.

Kata Tüttő told a press conference at a Budapest Waterworks site in Budafok that the project will be the largest investment of recent decades in the city where old lead pipes were often still in use. Replacing such pipes is a “burning need”, and the project will enable the replacement of around 3,000 connections, she added.

The programme will also involve the revamp of sixty wells on the Szentendre island and Csepel island, while part of the existing network will be refurbished, she said.

Meanwhile, opposition LMP called for an immediate modernisation of Hungary’s public waterworks, saying that the network was in such a “terrible” condition that its modernisation cannot wait until 2026, as included in a bill before parliament.

LMP leader and head of the sustainable development committee, László Lóránt Keresztes, told a press conference that the deleterious condition of Hungary’s waterworks was one of the country’s gravest problems. He criticised the government for not having recognised the severity of the problem earlier, insisting that several thousands of billions of forints would be needed to complete the work.

“The cabinet is still giving priority to securing water supplies for foreign battery plants instead of providing decent quality drinking water to Hungarians,” he added.

Read also:

Here is the turning point in the Hungarian real estate market, but with a twist

apartments in Budapest

By the end of 2022, the slowdown of the Hungarian housing market intensified. However, the spring months will really show what direction the real estate will take after the stagnation.

The combined housing market price index of the Central Statistical Office has decreased

For the first time in a long time, the combined housing market price index of the Central Statistical Office decreased in the last quarter of 2022. The already processed sales and purchase data showed 256.2 percent for October-December, falling short of the peak of 261.4 percent in July-September. This means that an average apartment could be bought for more than two and a half times as much at the end of last year as in 2015.

If we want to understand the 2 percent price drop between quarters, we have to look at the two submarkets separately, writes Pénzcentrum. The net price change of newly built apartments kept their prices during this period. However, in the second-hand housing market, prices fell by 2.3 percent between the two quarters.

New trend in the real estate market to come?

According to Dávid Valkó, the leading analyst of OTP Ingatlanpont, in the forty quarters of the last 10 years, the second-hand housing index decreased five times more compared to the previous three months. But he also adds that there have not been two such negative quarters in a decade. Not even during Covid, i.e. after every price drop, there was a correction of some size. However, in the current situation, this trend may break. Although there are still many uncertainty factors, Dávid Valkó calculates that a drastic price drop in Hungary is not expected in the next quarterly report either.

There is no significant price reduction in case of new apartments

The situation is clearer in the case of new apartments. For now, no significant price drop should be expected. Compared to the fourth quarter of 2021, the price of used apartments increased by 17.1 percent by the end of last year. “This, which we already thought was a noticeable slowdown, is the seventh largest nominal price increase in the last twenty quarters,” recalls Dávid Valkó. In the case of new constructions, the annual price increase is slightly more modest, 13.1 percent. At the same time, both market segments became cheaper in real terms by the end of 2022 as annual inflation reached 24.5 percent in December.

This is the average price to rent an apartment in Budapest in spring 2023

Apartment House Home Property furnishings

The Hungarian and Budapest rental market is picking up. Although average prices are still high, prices of apartments are not as daunting as previously.

Although it is still possible to rent an apartment in Budapest at a lower price than in previous years, the price level is still higher than last year’s average, piacesprofit.hu reports the latest summary by real estate marketplace Otthon Centrum.

Buyers’ market moves rental prices

The Hungarian housing market is stagnating, as prices and inflation reached their limit. However, the big turnaround favouring buyers haven’t come so far. At the same time, more and more experts are expecting a change of fortune for buyers once this current stagnation period ends. But until then there should not be any major changes in the rental market either.

“The real estate market trend, which began to slow down significantly from Q4 2022, continues to have an impact on the rental market,” said Otthon Centrum’s head of analysis, Gábor Soóki-Tóth.

Summarising the latest developments in the rental market, the expert said that in the first quarter of this year, the average monthly rent of used brick apartments in the capital was HUF 216,000 (EUR 570). This is higher than the average of last year, but compared to the last quarter of last year, the rent is already 6 percent lower.

District prices

The Buda districts – historically the most pricey – remain the most expensive, with an average monthly rent for apartments of HUF 256,000 (EUR 675). The decrease in these districts is the smallest, at just 2 percent. In the inner city, the average is HUF 220,000 (EUR 580), while in the outer Pest districts, the average monthly rent is HUF 156,000 (EUR 412), in both parts of the city, already 6 percent cheaper on average compared to the fourth quarter of last year.

In Budapest, rental prices for large apartments dropped the most significantly in the past months. For three-bedroom flats, the average price of HUF 263,000 (EUR 694) is already 15 percent lower than in Q4 2022. One-bedroom flats could be rented for HUF 144,000 (EUR 380), which is 2 percent lower than the last months of last year.

However, popular two-room apartments saw a rental price increase, as the HUF 212,000 (EUR 560) average was 7 percent larger than last year.

In the most popular districts, these are the prices tenants currently face while looking for an apartment: district V is the most expensive at HUF 327,000 (EUR 863) while in district XI, the average monthly rent is HUF 232,000 (EUR 612) and in district XIII HUF 205,000 (EUR 540).

In the outer Pest districts, which have traditionally lower prices, such as in district VIII, the average rental price was HUF 180,000 (EUR 475) and in district XIV HUF 175,000 (EUR 462).

Good news for home buyers: Hungarian housing market reaches a trend changeover

According to László Balogh, leading economic expert at ingatlan.com, housing prices have been stagnating since autumn 2022. He added that since January this year, even a decrease in prices can be seen in some places. László Balogh talked to Index about the ongoing trend change in the Hungarian housing market.

Trend reversal in the housing market

This year has seen a radical change in the real estate market compared to what we have been used to in the past seven years, said László Balogh, chief economic expert at ingatlan.com, to Index. He believes that there has been a drastic turnaround. According to him, between 2015 and 2022, buoyant demand absorbed supply. This resulted in fewer properties for buyers to choose from at higher prices.

Mr Balogh said that since the trend reversal, demand has halved year-on-year and supply has started to increase dramatically. “The number of advertisements for property for sale and rent has already surpassed the psychological 200,000 mark,” he said. That is 30 percent more than in March last year.

What is the reason?

According to the expert, the increase is mainly due to the expansion of properties for sale. In this situation, the bargaining power of buyers has also increased one and a half times compared to a year ago. The prospects clearly favour buyers who are staying in the market or are now entering the market.

The expert also said that house prices have tripled in the past seven years. This has not been a headache for buyers, Index writes, because as state subsidies have increased, interest rates on housing loans have become cheaper. Many people have therefore took out more loans.

“As a result, we have reached the point where every second home purchase is financed by some kind of loan”,

Mr Balogh added.

“Since January, we have already seen a drop in prices in some places, which is due to a fall in demand,” the expert said. He added that the fall in demand and increase in supply has happened very quickly accross the whole country.

Demand has halved in Budapest and in the county seats as well. There is currently no segment of the housing market that is not affected by the trend reversal.

Read also:

Is this the turnaround in the Hungarian property market? Experts are positive!

budapest property market airbnb rental real estate

The trends could have turned around as Hungarian property prices might have finally started to decrease for the longer term. Several important indicators point to this.

After soaring high inflation and prices in the Hungarian property market, a slight change of direction has already begun at the end of 2022. But now, according to ingatlan.com’s latest data and analysis, the prices might fall more predictably.

Trend turnaround in the property market

Although inflation and prices in the Hungarian property market started to stagnate, the long-anticipated price drop has not materialised so far. This is because many households have postponed their planned move due to high mortgage rates and the uncertain economic environment.

But László Balogh, ingatlan.com’s chief economist is more positive regarding long-term changes than before.

“Although year-on-year price increases are still significant in terms of average prices per square metre in the national market, the price increase slowed down last autumn. In fact, prices have already fallen in some locations” – Balogh commented on ingatlan.com’s latest data.

“In addition, buyers’ bargaining power has increased by one and a half times last year’s level to 6-8 percent in 2023. So it’s not an exaggeration to say that the price downward trend has started,” said László Balogh.

According to his analysis, while the number of people interested in homes for sale has fallen, supply has increased significantly. In Budapest, it was up more than 20 percent compared to March last year and almost 10 percent compared to January this year. In the county’s capital cities overall, supply is up by more than 60 percent year-on-year, but there has also been a double-digit increase of more than 11 percent compared to the first month of this year.

Price falls in several districts in Budapest

In Budapest, the average price per square metre of second-hand homes for sale was HUF 952,000 (EUR 2,500) at the end of March, up more than 8 percent from twelve months ago. At the same time, prices rose by only 0.4 percent compared to January, which means stagnation. Prices in several districts have fallen compared to levels seen at the beginning of the year. In district XIII – which is still one of the most popular locations in the capital-, the average price per square metre fell by 1.7 percent to HUF 1.06 million (EUR 2,640). In districts XV, XX, XXI and XXII, the price per square metre fell by 2-3 percent over two months, to HUF 698-971,000 (EUR 1,832-2,550).

However, that does not mean that demand will grow exponentially. According to László Balogh, inflation needs to recede and interest rates need to fall for the second-hand housing market to recover. “It is too early to give an accurate forecast, but the situation is expected to improve in the second half of the year” – says positively the economist.

In the meantime, the population of Hungarian suburbs is growing considerably, read more HERE.

Hungary’s new home construction booming in these regions

Debrecen

Although new home projects are slowing down in most of the Hungarian cities, according to a Hungarian real estate portal, some regions see booming housing construction.

Otthon Centrum real estate portal has completed its first quarter evaluation of this year, penzcentrum.hu reports. According to the results, a total of 254 projects in cities with county rights in Hungary are in the process of building 6,000 apartments. The number of new projects launched this year is 39. According to Gábor Soóki-Tóth, head of analysis at Otthon Centrum, these figures indicate a decline. According to him, 8.6 percent fewer projects are currently under development, and 8.9 percent fewer apartments are being built in cities with county rights than in the same period last year.

Debrecen at the top

However, this downward trend is not present everywhere. In Debrecen, there are currently 49 housing projects underway, and this is the first such high number in three years. So far this year, a total of 9 new projects have been launched in the city. Debrecen is followed by Szeged with 32 projects, while Pécs is in third place with 23 projects. The top three cities are followed in order by Székesfehérvár, Kecskemét, Nyíregyháza and Győr. Hódmezővásárhely is at the bottom of the list. In Hódmezővásárhely, there is only one four-apartment building under construction. In smaller cities such as Baja, Esztergom, Dunaújváros or Salgótarján, no such projects are currently in progress.

Szeged leads in the number of new apartments with 956, while Debrecen has 783 apartments under construction. Nyíregyháza is in third place in terms of the number of apartments being built. Here, 650 new apartments are currently under construction as part of an investment project involving several hundred apartments.

Price per square metre over HUF 1 million

Gábor Soóki-Tóth informed penzcentrum.hu that the prices of newly built apartments in cities with county rights have never been as high as they are now. Compared to a year ago, the average price of newly built apartments is 25 percent higher, which means HUF 947,000 (EUR 2,467) per square metre.

The pace of price rises was record high mainly in the first half of last year, but the 5.2 percent increase compared to the previous quarter indicates a slowdown,

the expert adds.

The most expensive cities are Sopron, Debrecen and Szeged. In Sopron, the average price of newly built apartments is HUF 1.1 million (EUR 2,865) per square metre, while the average price in Debrecen is HUF 1.09 million (EUR 2,839) per square metre and HUF 1.04 million (EUR 2,709) in Szeged. They are followed by Győr with HUF 987,000 (EUR 2,571), Veszprém with HUF 980,000 (EUR 2,552), Pécs with HUF 974,000 (EUR 2,537) and Érd with HUF 961,000 (EUR 2,503) per square metre.

The cheapest city for new-build apartments is Hódmezővásárhely, where the average price per square metre is HUF 485,000 (EUR 1,263). In Békéscsaba, new-build apartments are also cheaper than the average in the country, with an average price of HUF 606,000 (EUR 1,578) per square metre. Although the price of new-build homes has risen significantly in all cities, compared to the previous quarter, the most expensive cities have not increased their prices, penzcentum.hu concludes.

Read also:

Properties selling at surprisingly low prices on this lakeside in Hungary

Lake Tisza

A growing number of people are buying property in the settlements around Lake Tisza, relatively close to Budapest. The low property prices here are attractive to many buyers, who then use their newly purchased properties mainly as holiday homes or as guest houses.

What used to be considered a disadvantage has increasingly become an advantage for the Tisza Lake: The region has always lacked major investments and road developments, Világgazdaság writes. As a result, property prices here are well below the exceptionally high prices on Lake Balaton and Lake Velence.

Increasingly attractive property prices

As Világgazdaság reports, properties in lakeside settlements are being offered for sale at an average price of less than HUF 30 million (EUR EUR 77,820). The most valuable properties for sale are in Tiszafüred, where they were sold for an average of around HUF 40 million (EUR 103,760) at the end of March.

Tiszafüred is followed by Poroszló, where properties can be bought for slightly more than HUF 30 million. In Abádszalók and Kisköre, the average price is around HUF 24.5 million (EUR 63,550), while in Sarud, it is currently around HUF 25.6 million (EUR 66,404).

Properties in more remote areas away from the lakeside are even cheaper. For example, properties on offer in Tiszaderzsi are half the price of those in direct lakeside settlements. This is due to the lack of local jobs and tourism.

Potential for development

Although major investments and road developments have not yet reached the region, Lake Tisza is still easily accessible from Budapest. From the Hungarian capital, it takes only an hour and a half to reach Lake Tisza. This means that Lake Tisza is about as close to Budapest as Lake Balaton. In addition, Tiszafüred and Poroszló, for example, can be reached by direct rail connection.

In addition to its proximity to the Hungarian capital, the potential for development in the region may also be attractive to property buyers. According to László Balogh, economic expert at ingatlan.com, one basis for this potential will be the upcoming government developments focusing on Eastern Hungary. Furthermore, the development of cycling infrastructure in the lake region is also in progress.

Tisza tó
Biker’s bridge over Lake Tisza. Source: Facebook/Csodás Magyarország

In addition, the upgrading of beaches started last year, and new housing projects have also been launched. Last year, for example, unique floating houses were built in Abádszalók.

Unique floating village built at Lake Tisza
Unique floating village built at Lake Tisza. Source: Laszli Adrienn Studio

It is worth knowing that around the lake, there are mostly quite old holiday cottages. Therefore, in addition to the purchase price, buyers also have to expect significant renovation costs, Világgazdaság notes. However, given that the region keeps improving, and properties at Lake Balaton are far more expensive, it could be still worth it for buyers.

town house
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Property for little money in Hungary? Search here!

real estate Hungary

We have reported on the affordable properties in Miskolc, a town in Northeast Hungary before. Now Pénzcentrum has taken a look at the cheapest streets to buy property in Veszprém, one of Hungary’s oldest founded cities.

In the cheapest streets of Veszprém you can find residential property for less than HUF 100,000 (EUR 260) per square metre. What is more, according to the latest data, the cheapest flats were sold for just HUF 17,000 (EUR 44.28) per square metre in the last year surveyed by the Central Statistical Office (KSH).

Affordable property in Veszprém

According to National Tax and Customs Administration (NAV) data from official transactions available at the KSH, the average price asked for a square metre of residential property in Veszprém in the second quarter of 2022 was HUF 634,464 (EUR 1652.52), Pénzcentrum reports. At the same time, there is a larger variation in unit prices and transaction numbers by property type.

At the request of Pénzcentrum, ELTINGA has compiled a detailed set of data. This shows that in the second quarter of 2022, second-hand brick apartments sold for HUF 693,296 (EUR 1805.9) per square metre, based on 135 transactions. Meanwhile, panel apartments sold for HUF 580,200 (EUR 1511.30), based on 124 transactions. For detached houses, owners asked HUF 541,114 (EUR 1409.49) per square metre, based on 13 transactions.

This is the average data. The question is: what do deeper statistics show? To find out, Pénzcentrum has extracted the most affordable streets of Veszprém in 2021 from the recently published “Ingatlanadattár, Magyarországi lakásárak, 2005-2021” (Real Estate Data, Hungarian Housing Prices, 2005-2021) by KSH.

The 20 cheapest streets in Veszprém

  1. Házgyári Street (HUF 17,000/sqm) (EUR 44.28)
  2. Bolgár Mihály Street (HUF 80,000/sqm) (EUR 208.33)
  3. Szarvas Street (HUF 86,000/sqm) (EUR 223.83)
  4. Fejesvölgy Street (HUF 95,000/sqm) (EUR 247,60)
  5. Hajnal Street (HUF 101,000/sqm) (EUR 263.20)
  6. Alsóerdő Street (HUF 114,000/sqm) (EUR 297.07)
  7. Győri Street (HUF 114,000/sqm) (EUR 297.07)
  8. Május 1. Street (HUF 115,000/sqm) (EUR 299.68)
  9. Halle Street (HUF 119,000t/sqm) (EUR 310.10)
  10. Batthyány Street (HUF 129,000/sqm) (EUR 336.16)
  11. Munkácsy Mihály Street (HUF 129,000/sqm) (EUR 336.16)
  12. Előd Street (HUF 131,000/sqm) (EUR 341.38)
  13. Haszkovó Street (HUF 133,000/sqm) (EUR 346.59)
  14. Damjanich János Street (HUF 136,000/sqm) (EUR 354.41)
  15. Zirci Street (HUF 138,000/sqm) (EUR 359.62)
  16. Stromfeld Aurél Street (HUF 139,000t/sqm) (EUR 362.22)
  17. Kossuth Lajos Street (HUF 146,000/sqm) (EUR 380.46)
  18. Síp Street (HUF 146,000/sqm) (EUR 380.46)
  19. Tiszafa Street (HUF 146,000/sqm) (EUR 380.46)
  20. Jutasi Street (HUF 148,000/sqm) (EUR 385.68)
budapest_real_estate_building_flat rent autumn_panorama dnh_kató_alpár_
Read alsoThis is how much an apartment costs on average in Budapest right now

 

Hungarian cities’ population decreases as suburbs grow

The number of permanent residents fell in county seats and several Budapest districts last year, as suburbs saw growing populations as well as property price rises, according to a property analyst.

The population grew by 821 people in Érd, near Budapest, where property prices also grew by 16 percent to HUF 753,000/sqm (EUR 1944). Other localities near the capital saw the same trend, with the population of Vácrátót growing by 12 percent and property prices by 17 percent, László Balogh of real estate website ingatlan.com said on Wednesday.

In other suburbs such as Erdőkertes, Nagytarcsa, Biatorbágy and Gyömrő, populations grew by some 300-400 people, while property prices rose by 4-21 percent, the statement said.

Meanwhile, the population of Budapest fell by 13,000 last year to 1.63 million, and cities like Pécs, Szeged, Debrecen and Miskolc lost 1,100-2,200 inhabitants, the website said. Still, property prices in cities grew by 13-21 percent, to HUF 660,000-813,000 (EUR 1704-2099).

The price increase in districts and country seats already losing inhabitants was due to continued high demand due to investors and the population loss came to only 1 percent in those cities, ingatlan.com noted. Also, certain Budapest neighbourhoods and university districts remain popular with investors who are driving up prices, the statement said.

Meanwhile, prices per square metre in Budapest’s 5th district have grown by more than HUF 1 million (EUR 2581) in 10 years, with average spending on real estate exceeded HUF 100 million (EUR 258,118) per unit, according to another real estate agent, Duna House.

In 2022, the proportion of investment purchases rose by 15 percentage points year on year to 60 percent, with the inner 5th, 6th and 7th districts especially popular. Data for 2023 so far show the price per square metre in these districts increased by 6 percent, to HUF 1.08 million (EUR 2788), compared with the average price in the second half of the previous year.

four seasons budapest gresham palace
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Rental market: wage increase in Hungary drives up prices

Housing market Rent prices Budapest downtown

Prices at the Hungarian rental market increased in February. The price increase in Budapest is more pronounced compared to the countryside.

Prices continued their upward trend in February in the Hungarian rental market compared to January. According to the Central Statistical Office’s (KSH) and ingatlan.com’s joint report, rising wages affected the rental market.

In February, rental prices increased in Budapest by 1.4 percent, and by 1.8 percent in the countryside. László Balogh, ingatlan.com’s chief economist says the trend is not surprising as the latest wage increase has begun to affect the market.

“As expected, rising wages have appeared in the rental market, with the minimum wage and the guaranteed minimum wage both rising significantly from January, pulling average salaries higher,” Balogh wrote.

“People received their increased payments in February, which the landlords who rented out their flats had also counted on,” Balogh explained the underlying cause for the upward trend. The expert went on to say that rents might rise further this year, but at a slower rate than inflation.

However, the monthly average rent rises over the year still account for a 19.8 percent increase in the national average rent rates. This number is even larger in the Hungarian capital: Budapest saw a 21.5 percent increase in rents so far in 2023.

Still, Balogh writes that the situation is not that bad. “This is a significant increase, but if we consider inflation, the figures appear more favourable.” This can be attributed to the fact that in real value, national rents in February were 13 percent below the January 2020 peak, while those in Budapest were 15 percent below.

Budapest crosses HUF 200,000 mark

In Budapest, the average rent on the rental market has been HUF 200,000 (EUR 506) since last autumn according to ingatlan.com’s data. For March, the average has risen to HUF 210,000 (EUR 531).

The most expensive district in Budapest is District V, the downtown area of the capital with an average rental price of HUF 320,000 (EUR 810). In Districts XI and XIII, which have the highest supply, owners want to rent out their flats for HUF 210,000 (EUR 531) and HUF 220,000 (EUR 556), respectively.

Within the borders of Budapest, Districts XX and XXIII remain the cheapest, with an average of HUF 139,000 (EUR 352) and HUF 150,000 (EUR 380).

Tihany Balaton Uplands
Read alsoRental prices increased drastically around Lake Balaton

This is how much an apartment costs on average in Budapest right now

budapest_real_estate_building_flat rent autumn_panorama dnh_kató_alpár_

According to the latest data, the number of homes sold in the Hungarian capital, Budapest, fell by 30 percent. It is the second-lowest number of new homes sold in the last seven years. Despite falling demand, prices are still rising. Here are the latest Hungarian property trends.

Falling supply

In the last quarter, a large number of new homes have entered the housing market. 840 new homes have been put on the market. The only time there were fewer than this was during the beginning of the pandemic in 2020.

Low demand and few new projects have led to a stagnation in the number of vacant dwellings. There are currently 6200 new-build properties for sale in Budapest. More than half of the projects planned for delivery in the second half of 2024 or later are vacant. However, almost 70 percent of the properties completed this year already have owners.

At the same time, the supply of apartments that have been completed or at least started the occupancy permit procedure has increased compared to the previous period.

Low demand, yet rising prices

The persistently low demand has led to a slight slowdown in the growth of prices per square metre, portfolio.hu reports. In fact, the less than 1 percent increase could even be described as stagnation.

The annual price change was 19.6 percent, 10 percentage points lower than in the previous quarter. Currently, the average price per square metre in Budapest is HUF 1.43 million (EUR 3633.23).

In all districts of the Hungarian capital, demand was down. Only one-room apartments showed some variation. Sales of two-room flats halved, three-room properties fell by 40 percent, while sales of larger flats dropped by 30 percent.

One in five new-build properties sold in the first quarter was one-bedroom, almost double the previous trend.

At the beginning of 2023, the average price of a new home in Budapest almost reached HUF 100 million (EUR 254,071.70). This is an increase of more than 150 percent in 7 years, compared to HUF 40 million ((EUR 101,628.68) at the beginning of 2016.

Tihany Balaton Uplands
Read alsoRental prices increased drastically around Lake Balaton

What’s happening? Foreigners are buying up Hungarian property for large sums of money

Budapest property real estate market housing

Few foreigners buy property in Hungary, according to Otthon Centrum’s data from last year. Barely three percent of buyers are not Hungarian citizens. However, if foreigners do become owners, they spend HUF 10 million more than the average Hungarian buyer.

Only 2.7 percent of buyers are foreigners, but they spend a lot

According to Otthon Centrum, Hungarians are still the main buyers, Pénzcentrum reports. “After aggregating last year’s data, we found out that 97.3 percent of our customers are our compatriots,” said Gábor Soóki-Tóth, summarising the previous year’s sales data by nationality.

According to the head of analysis, one third of the foreign customers of the network are German nationals, reaching 35 percent. Somewhat surprisingly, the second most active were French and Romanians with the same percentage (12.5 percent), while Slovak customers were slightly fewer (10 percent), followed by Chinese and Russians.

Buyers from all around the world

There were also buyers from many European countries, and even from outside the continent. Mr. Soóki-Tóth said that there were even buyers from the US and Iran. At the same time, despite the prolonged war in our neighbouring country, there is no sign of a greater number of Ukrainian buyers entering the Hungarian property market.

In terms of age, expats covered all age groups. The 40-49 age group was the most represented, with 29 percent, followed by the 50-59 age group with 22.6 percent. The under-30s accounted for 19.4 percent, the 30-39s for 16.1 percent, while the least frequent buyers were the over-60s, at 12.9 percent, Pénzcentrum writes.

What property types do foreigners choose and where?

Among the property types, the favourite choice of foreigners is the second-hand apartment. 50 percent of buyers opted for this type of property, while 27.8 percent bought a second-hand house. 13.9 percent bought a new-build property and only 8.3 percent chose a flat. Compared to the buying habits of Hungarians, foreigners tend to favour new and second-hand homes, and fewer are considering a detached house or a flat.

The majority of non-Hungarians, 62.5 percent, bought property in Budapest. District XIII performed particularly well, with 29 percent of all purchases. Beyond the capital, there were occasional purchases. However, there are always foreign buyers in the south-western border region and on the shores of Lake Balaton.

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Read alsoPHOTOS, VIDEO: Budapest’s new waterfront residential area under construction

Hungary’s property market past its nadir, prices will increase again

the most expensive street in hungary budapest

2022 marked the nadir of Hungary’s property market, experts agree. However, 72 percent expect slow but gradual increase in 2023. Based on a survey of Duna House, they believe the deciding factors in that process will be the change in interest rates, inflation, and the international political and economic situation. February transactions show a 7 percent rise, showing that the market is becoming revitalised.

According to Pénzcentrum, last year was the time of significant changes in the international and Hungarian property market. That is because of the soaring inflation, the high interest rates, and the uncertainties caused by the ongoing war in Ukraine. As a result, people started to search for rent instead of buying property in such incalculable environment. Therefore, supply grew while demand decreased, so prices fell.

Duna House is present in every region in Hungary. Therefore, they have data on the latest trends from almost everywhere, Károly Benedikt, the PR and analysis leader of the Hungarian real estate agency, cleared. Thus, they created a questionnaire which was filled by a lot of real estate agents. 72 percent of them remained hopeful about 2023. They calculate a slow expansion for this year and acknowledged that the end of 2022 was the nadir.

According to them, the most severe contributing factor to the contraction of the market segment is high inflation (74 percent) and expensive loans (71 percent). 43 percent of the real estate agents added the uncertain international economic and political environment. If those factors show positive signs, the property market will start booming again in Hungary.

Interestingly, Hungarians do not buy property because of the high rental prices and the low number of newly-built apartments. Real estate agents do not expect more people to buy real estate by using loans. Instead, they calculate a 10 percent decrease in that respect.

They do not think buyers should wait for the transactions. Only 6 percent expect a rise in property prices concerning second-hand apartments. In the case of the newly-built ones, however, 37 percent of them believe prices will continue to go up, while 43 percent calculate stagnation. Before, we wrote that the price of small apartments in a good location in Budapest or other municipals would continue to stagnate or even rise.

Thus, provided you plan to buy property in Hungary in such “priority” locations, you should not wait. That market segment shows signs of expansion again, so you will probably not do better business later than now.

Budapest flat property
Read alsoRental market turnaround might not come that soon in Hungary

Expert shared when prices will start to increase again in Hungary’s property market

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In February, buyers retained their upper hand in Hungary’s property market. However, experts shared when prices can rise again. And that will happen sooner than most people expected.

According to 10perc.hu, in some segments of the Hungarian property market, experts expect a price decrease. However, this summer, buyers will face a slow increase in prices again. It may last 3-4 years until prices reach the pre-crisis level. Interestingly, property prices in Hungary are still lower than in the neighbouring countries.

The fall in Hungary’s real estate market started eight months ago when it became clear that the government’s utility price cap scheme was no longer retainable. As a result, houses and apartments with high utility costs suffered significant price decreases. Furthermore, thanks to inflation, demand dwindled, and supply remained constant.

Zoltán Gadanecz, the owner and founder of the GDN Ingatlanhálózat, a real estate agency, said a slow increase in the sector would start during summer. However, nobody expects a spike like what we saw after the pandemic.

Furthermore, Mr Gadanecz highlighted that investors would also return to the market. Moreover, there will be a lot of companies which will no longer rent an office because that will not be worth it. Instead, they will buy one. That is how they can save money later on the utility prices.

Banks offer loans with an interest rate of around 8 percent, which is not very high, he cleared.

Budapest houses flats
Read alsoSurprising: most homes were built in these regions last year in Hungary

Surprising: most homes were built in these regions last year in Hungary

Budapest houses flats

More housing is planned in Budapest this year, fewer in rural areas. Last year, 20.5 thousand new dwellings were built across Hungary. 35 thousand were planned to be built on the basis of permit applications.

In Budapest and Pest county, the number of dwellings delivered in 2022 decreased. However, the number of dwellings planned to be built more than doubled, according to today’s report from the Hungarian Central Statistical Office (KSH). In rural areas, fewer new residential buildings are planned.

According to the official figures, which now cover the whole year, 20,540 new homes were built across Hungary in 2022, up 3.2 percent from a year earlier, vg.hu reports. The number of dwellings to be built under building permits and simple notifications was 35,002, 17 percent more than in 2021. In Budapest, 6,610 dwellings were put into use last year, 6.1 percent fewer than in 2021.

The number of new dwellings increased slightly by 11 prcent in the cities with county rights, decreased by 3.9 percent in the other cities and increased by almost a quarter in the municipalities compared to the previous year. In the Pest region, the number of dwellings brought into use fell by a similar rate to the capital, with 3,800 new dwellings, a decrease of 7.8 percent. Outside the central metropolitan area, the number of new dwellings increased everywhere compared to the previous year.

Budapest flat property
Read alsoRental market turnaround might not come that soon in Hungary