The prices of new flats in Budapest set a historical record!
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The current housing market in Hungary is characterised by large construction projects, growing supply and high demand. These trends started primarily in Budapest but since then they have spread to other large rural cities as well. The average price per square meter of newly built flats in Budapest exceeded the symbolical HUF 1 million (EUR 2800) in January, which has never happened before – according to the latest analysis of ingatlan.com.
The new flats in the capital are the most popular
In 2021, the desire to build houses has already increased significantly and this is expected to continue both this year and in the following, with many new homes expected to be handed over. In the first 11 months of 2021, more than 27,000 housing permits were issued, which is 20 per cent more than in 2020, says László Balogh, an expert at ingatlan.com. He also gave an explanation: “The increase in the construction of the new flats is mainly due to the reduced VAT on the construction, which was re-introduced in 2021. However, it is also worth noting that not all permits will eventually lead to the construction of new apartments, in some cases the project will never be completed. The exact ratio is difficult to say for the time being, but it is not a large figure. The value of the permits obtained this year will be increased due to the fact that after 2022 it will be possible to sell a new apartment at a reduced VAT rate only by permits issued until the end of 2022.”
Prices on record high
Housing construction is characterised by an ever-increasing supply, but in the meantime, demand is also getting higher, so the market remains in balance which can also be seen in the rise of the prices. In January 2022, the market for new homes in Budapest has set a record. As a result of the 17 per cent annual increase in the average price per square meter, the supply amounted to HUF 1.03 million (EUR 2800). Thus it exceeded the symbolical HUF 1 million, which has never been seen before. There are fewer and fewer districts in the capital where prices per square meter are less than a million forints.
One of the problems with new builds is that the developers tend to cram in lots of small rooms into the floorpan. So for instance while a flat like mine (built in 1910) is 135m3 and has 3 rooms, a large kitchen, 2 bathrooms and a guest WC, a new build of the same size will cram in 5 rooms, the kitchen will be open-plan (part of the living room) and probably about 20m3 or more is a balcony which is generally an under used space (useless in the winter, that’s for sure). Also the monthly service charges are much higher in new builds (I own a newish build as well that is rented out). Over hyped, over priced and suffering from over supply. Not good investments except as rentals
Pevsner – Concur.
The kitchen appliances tend to be not middle to high quality.
Light fittings – taps & bathroom “fixtures & fittings” – do appear from a leval of quality middle of the road.
If in my opinion, the over-all finish of these new flats or apartments – give an impression that they are PLASTIC compared to our house circa 1910 – similar size to yours – located in District V .
This opinion would probable be understood, by vast numbers who are in the Market – to Buy.
Trust they are in NO hurry – as the Property Market – is Saturated with Sellers and the Economy – has got the Wobbles – that a reversal in its downward trend – all signs are that we are in for a lengthy period of time that will see the Economic & Financial position of Hungary remain under extreme pressure.
Supply & Demand – we build on and on – but who will buy ???
Broadsheet of the Property Market – flats, apartments, houses – new & renovated, warehouses & storage facilities – prices still being asked – at Ridiculous levals.
I still wait for a “Mean” correction across the board of 8% to 12%.- downwards of Price – we still see at this point in time.
Hotels can’t be forgotten – we build on, renovate – the numbers continue to grow.
Interest rates continue up-wards – inflation increases and Tourism – summers bit off yet, having no real effect on the economy.
GDP of Hungary through Tourism – 9.4% of the Budget – pre February 2020 and Hungary – with the highest VAT = 27% in the member countrys of the European Union – we are CHALLENGED as a country at this point of time,
We still live in a Country – a World – that is still infected with a Novel Virus.
There is an English expression that “fits” the vast number of these new flats/apartments and that is they are likened to a “Dog Box” in size.
I have used this forum numerious times over the past (9) nine months – taking a very bearish position on the broadsheet Property Market that in probability will be a scene of Carnage – sooner than later in Hungary.
Trust that I’am Wrong – but there is increasing trepardation in me that suggests we are in for a massive movement of SELL at all costs – to bring the leval of Property values in Budapest, Hungary back to realistic and affordable price ranges.