Trend turn arrived: here is when property prices will start to fall in Hungary

Dániel Csorba, a blogger and leader of a real estate agent Facebook group, asked more than 308 of his colleagues what they expect to come in the Hungarian real estate market. He revealed his findings in a report summed up by Portfolio, a Hungarian economic news website. Below you may read how professionals think prices will change in the Hungarian property market. But we can tell you in advance that there will be considerable changes concerning this market segment in 2023 in Hungary.

Demand falls, supply grows

Mr. Csorba asked 16 questions in his questionnaire filled by 308 of his real agent colleagues, having tremendous experience in the property business. He found that demand fell by an average of 37 percent since early September everywhere in the country. Meanwhile, supply grew by 12 percent compared to the months before.

The most significant decrease in demand was in Pest county (45 percent), while supply grew by 18 percent around Budapest. Meanwhile, the smallest change was in Budapest in this respect. But that means a 33 percent demand shrink and a 10 percent supply growth, portfolio.hu wrote.

Thanks to the government’s changes in its utility price cap scheme, it became difficult to sell non-insulated, big, family houses consuming a lot of electricity, gas, etc. That trend is almost non-existent in the case of small apartments located in Budapest. Investors would like to buy small, cheap apartments to renew and realise considerable profits by selling them.

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Property market changes: small flats rule in Budapest

However, almost nobody would like to buy family houses. In that segment, the decrease reaches 28 percent. The same goes for building sites.

Demand for real estate loans fell significantly. Before, 60 percent of the buyers used loans for purchases. This rate has been reduced to only 15 percent lately. In downtown Budapest, where the rate of cash purchases was traditionally high, only 9 percent of the apartments are bought using loans.

Foreign investors are the most active in Budapest. In Hungary, the rate of foreign purchases was 7 percent in September, while in Budapest 9 percent, and in the downtown 12.5 percent. The weak forint helps that process, Mr. Csorba added.

In 2023, everybody expects a nominal price decrease. That will be the lowest in downtown Budapest (4 percent), while nationwide it will probably be around 11 percent. Family houses are in the worst situation. Their price is expected to decrease by 17-18 percent in 2023.

Portfolio wrote before that their experts did not expect a price reduction in the capital. Instead, their prognosis talked about a price increase in the case of small apartments not reaching the rate of general inflation in Hungary.

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Source: portfolio.hu