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.