What can we expect from the Hungarian real estate market?
It’s realistic to say that the last year was not kind to the Hungarian real estate market. Multiple factors played into the fallback of the market, such as the contraction of government support, the energy crisis, those significantly increased interest rates and the less-than-ideal foreign economic conditions. The current real estate market is in a slump, which raises many questions.
How long does the stagnation last and how did it get this bad? Where is it worth investing and what are people looking for? How will the real estate market change due to the current situation?
The recent conference of OTP Home tried to answer these questions and some more, Telex reports.
How long will the stagnation last?
Gergely Tardos, CEO of OTP Statistics Centre held a presentation in which he painted a rather gloomy picture of the past year. However he highlighted that the worst is over and the coming year is most likely going to bring a rebound for the real estate market. In 2024 even a slight expansion can be expected. For this to come true the most important ingredient is stability.
This isn’t guaranteed, because the real estate market depends on a ton of factors that vary unpredictably.
Important contributors to this hopeful development are a stable economy and the inflation rate. The international scene wasn’t kind in the last two years, which also contributed to the current real estate situation. Luckily, in the opinion of the professionals the energy crisis is not real danger in the coming year.
What will change in the real estate market in the coming years?
According to the currently available data, the Hungarian economy is expected to emerge from recession next year. This means that inflation will decrease, and, paralely, real wages may significantly increase, in the best case scenario by 10 percent. This could mean a growth in state funded beneficiaries. In the opinion of Gergely Tardos, the worst is over, and the stagnation won’t last much longer on the real estate market and by 2025 there could be a significant development.
Is it worth investing right now?
The data for the real estate market rates were based on otpotthon.hu, which is one of the biggest competitors in Hungary in this industry.
Zsuzsa Lipták, CEO of OTP Home Solutions, clarified at the event that online trends also precisely indicate the decline of the real estate market in recent times.
Transaction data decreased by more than 30 percent in this period, equivalent to the 2008-2009 crisis level.
Online trends show that real estate ads stay online much longer, than in previous years. Most sellers are playing the waiting game, but 32 percent of the current advertisers has already modified their original price. Most of them downward, averagely willing to reduce by an 8-11 percent.
Analyzing advertising statistics of their database, the professionals at OTP state that there’s a general growth detectable.
Although the prices of panel apartments have decreased by four percent, family house prices have increased by an average of three percent compared to last year. Prices of new buildings went up by eight percent, and brick apartments by five percent. However, Zsuzsa Lipták pointed out that, considering inflation data, this still represents a decline in real value.