Property prices in Budapest 2022 in EU comparison
Property purchase and rental prices in Budapest continue to trend upwards. At 18.71%, the inflation and growth rates in 20/21 significantly exceeded the inflation rate, which was just over 5%. 18.71% based on domestic purchasing power – 16.27% in the euro area. This means that Budapest is experiencing the most dynamic price increase of all European capitals (EU).
The absolute purchase prices (not inflation rates) in Hungary are still comparatively cheap in the middle range, but with the greatest growth momentum.
How will the markets behave? Residential real estate develop in Europe?
The effects of the COVID-19 pandemic on the housing market are still being felt, although the situation has stabilized compared to the previous year, not least due to intensive government support measures to offset the economic consequences of the pandemic. A shortage of raw materials will be one of the most serious challenges for future construction projects, as will rising energy and refinancing costs. Uncertainty about the availability of workers and building materials will increasingly impact project planning.
A significant increase in the price of new buildings, property purchase prices and rents is expected. Newer urban planning regulations also significantly restrict the areas available for new buildings. So there is a mismatch between demand and supply.
In any case, the demand for property has increased in recent years and will continue to increase - the authors attribute this to the following factors:
- interest rates have so far been relatively low
- Changes in the structure of private households (#singles)
- Urbanization through migration to larger cities
- Perception of real estate as a stable long-term investment
Rent prices in Europe
The dossier also contains Europe-wide statistics on average property rental prices; Both European countries and cities are compared here. Paris is and remains the leader with an average of €29.10 per sqm, Budapest is still in the middle with €10.39, but not that far away from Hamburg.
The cheapest rental prices can be found in the Balkans, e.g. Sofia/Bulgaria at €4.60 or even lower in Burgas, also Bulgaria at €2.90.
Purchase prices for real estate in Europe – How much are prices rising?
As already mentioned above, the inflation rates for real estate are interesting when comparing European capitals in the last years 20/21:
Here Prague leads with 20.13%, Amsterdam with 19.69%. Then Oslo with 17.15% and Budapest with 16.27%. As already mentioned above, the authors find the most significant increase in domestic purchasing power in Budapest with 18.71% and in Hungary in general with 24.05%.
The absolute purchase prices (not inflation rates) in Hungary are still comparatively cheap in the middle range, but with the greatest growth momentum.
How will the markets behave? Residential real estate develop in Europe?
The effects of the COVID-19 pandemic on the housing market are still being felt, although the situation has stabilized compared to the previous year, not least due to intensive government support measures to offset the economic consequences of the pandemic. A shortage of raw materials will be one of the most serious challenges for future construction projects, as will rising energy and refinancing costs. Uncertainty about the availability of workers and building materials will increasingly impact project planning.
A significant increase in the price of new buildings, property purchase prices and rents is expected. Newer urban planning regulations also significantly restrict the areas available for new buildings. So there is a mismatch between demand and supply.
In any case, the demand for property has increased in recent years and will continue to increase - the authors attribute this to the following factors:
- interest rates have so far been relatively low
- Changes in the structure of private households (#singles)
- Urbanization through migration to larger cities
- Perception of real estate as a stable long-term investment
Rent prices in Europe
The dossier also contains Europe-wide statistics on average property rental prices; Both European countries and cities are compared here. Paris is and remains the leader with an average of €29.10 per sqm, Budapest is still in the middle with €10.39, but not that far away from Hamburg.
The cheapest rental prices can be found in the Balkans, e.g. Sofia/Bulgaria at €4.60 or even lower in Burgas, also Bulgaria at €2.90.
Purchase prices for real estate in Europe – How much are prices rising?
As already mentioned above, the inflation rates for real estate are interesting when comparing European capitals in the last years 20/21:
Here Prague leads with 20.13%, Amsterdam with 19.69%. Then Oslo with 17.15% and Budapest with 16.27%. As already mentioned above, the authors find the most significant increase in domestic purchasing power in Budapest with 18.71% and in Hungary in general with 24.05%.
Outlook:
Growth in the euro zone partially recovered in 2021 after the slump caused by the COVID-19 pandemic, but was unable to reach pre-Corona levels. The International Monetary Fund is forecasting economic growth of 2.8 percent for the entire euro zone this year. However, this forecast does not yet factor in the risk that Russia will deliver less or no gas at all in response to the current sanctions imposed as a result of the attack on Ukraine. The combined effect of supply chain disruptions, the energy crisis and high prices for food and other raw materials are accelerating or continuing to accelerate inflation. In the Eurozone it reached 7.5% in April this year, a high for several decades.
If you are interested, it is worth taking a deeper look - you can find a lot of differentiated classifications and analyzes here:
https://www2.deloitte.com/content/dam/Deloitte/de/Documents/real-estate/Property-Index-2022.pdf
