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.
The most expensive flats are on the Buda side
The three most expensive parts of the city are located in Buda, I., II. and XII. district, where the average price is HUF 1.7-1.9 million (EUR 5300), which is 14-42 per cent higher than a year earlier and is approximately double the average price in Budapest.
“The three largest districts with the most significant options are III., XI. and XIII., each offering more than 500 new homes for sale, due to the fact that the largest volume of real estate developments is taking place here.
The cheapest districts are the XIX., XX. and XXI. district with prices reaching about 70 per cent of the average price in Budapest, says forbes.hu.
Rising prices in the countryside
Among the large rural cities, Debrecen in eastern Hungary is the most expensive with an average price of EUR 2225 per square meter. That is 23 per cent more than a year ago. This is followed by Veszprém and Szeged, the prices in these two cities were EUR 2160 and EUR 2010. The annual rise in prices in these cities was 32-34 per cent. Nyíregyháza is one of the cheaper cities, but the price of EUR 1380 means an increase of more than 20 per cent in one year.
Significant price difference between counties
Apart from Budapest, Győr-Moson Sopron and Pest counties also achieved above-average results in terms of apartments under construction. However, there are also counties where far fewer homes are being built. In the former regions at the top of the list, 20 times more homes are being built than at the bottom of the list. The weakest result are in Tolna, Nógrád and Heves counties.
We just posted few days ago about the record-high rent price increase in Budapest, you can find the article here.
Source: ingatlan.com, forbes.hu
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