House prices in Hungary are depreciating, but this has not affected the liquidity of properties
According to a report published in May by a specialised institution, house prices in Hungary have fallen. At the same time, sales have not increased.
Experts analysed the situation in the property market. According to the data, housing became cheaper in the fourth quarter of 2007. Then the decline was at the level of 3.6%. Over the past period, the price of real estate in Hungary fell by 10.6%. This dynamic continued in 2023: in the first three months, the cost of housing fell by 15% year-on-year. In the second quarter, the decline was 19%.
Last year, developers and owners completed 142 thousand transactions on the Hungarian housing market. This figure is 19% lower than in 2021. In the first quarter of 2023, the situation with property sales was as follows:
– Budapest: The number of sales transactions fell by 52%;
– major cities: the decline was 49%;
– other cities: sales volume fell by 36%;
– rural areas: transactions fell by 56%.
As for the activity of foreign buyers in the Hungarian market, their share in the purchase of dwellings was around 6.4% in the fourth quarter of 2022. The highest demand was for properties in the capital, in the Pest district. Almost 18% of the country’s transactions took place here.
The decline in the cost of Hungarian housing has not had a noticeable impact on the level of liquidity. Experts even note that the time it takes to sell a property on the market has shortened since the price drop. If the average time from making an offer to buying a house was 3.2 months in 2022, it is now 2.9 months. For flats, the average time to sell is 1.5 months this year, while in the previous period, properties were on the market for around 2.9 months.
Real estate market development in Hungary
The Ingatlan platform has analysed the most popular places to buy a house in Hungary. These are mainly properties in villages near Lake Balaton in the western part of the country and Velenc, not far from the capital. It turns out that the cost of homes near Lake Balaton has risen by 250% in five years and Velenc by 105%. Experts cite a number of reasons for this. One of the keys is the transformation of the real estate market in Hungary.
According to Ingatlan analysts, the demand for housing in rural areas has increased significantly over the past ten years, and not only in the vicinity of Budapest. The growth in the country’s population and the need for property have played an important role. In the town of Alsoersch, for example, the number of inhabitants has risen by 10% and the price of properties by 222%. Balatonalmadi has also seen a 10% increase in population and a 280% increase in property prices.