Property prices in Budapest – Update August 2022
According to Duna House estimates, sales in the real estate market recovered in August after the low point in mid-summer. The agent group's estimated 9,748 sales show an increase of more than 8% on the previous month, but still 14% less than the same period last year.
Although August has always been the strongest month in the last 5 years, in line with the traditional trend, experts expect further expansion of the real estate market in the fall, which is in a phase of transition.
The change in overhead costs primarily had an immediate impact on the demand side, while a greater impact on the supply side is expected in the coming months when the first bills for the heating season are issued.
The summer season is also being felt strongly in the mortgage market. Duna House Finance estimates that mortgage loans worth 90 billion forints were realized in August 2022, which is the same amount as in July. According to financial experts, the sharper decline in the summer is due to the slowdown in the real estate market in the summer, as well as the fact that the closing and disbursement of green home loans committed at the beginning of the year influenced the reported closed loan volume in the first half of the year.
The presence of investors in real estate transactions is gradually increasing, both in Budapest and in the countryside. In the capital, the inner city districts and small apartments of 20-40 m² were still popular in August, while in Pest properties with more than 120 m² almost completely fell out of favor with buyers.
However, the average investment amount fell to HUF 46 million in August this year, compared to HUF 54 million in July.
Despite the increase in overhead costs in Budapest and the countryside, 21-21% of investment purchases in Budapest and the countryside this month were still driven by a move to a larger apartment. However, the first signs of change are already visible in the rural property market, where the proportion of people moving to larger properties has fallen by 6 percentage points compared to July and by 10 percentage points compared to the same period last year. The potential wait of those seeking peace and quiet in the countryside or in metropolitan areas to buy a house is also reflected in the development of purchasing motivation and transaction parameters.
Sales data for August shows a significant acceleration in property sales compared to the same period last year, but not all areas and property types were able to match July's pace. The panel apartments, which have so far been spared from the rise in energy prices, are being sold the fastest. In western Hungary and the Pest part of the capital it takes less than two months, but in the rest of the country it takes no longer than 2.5 months for this type of property to be successfully sold. If we look at the sales time of used brick apartments, the dynamics are stagnating in Buda, in Pest the sales time has increased slightly, and in the inner city districts of the capital it can be up to half a year.
Source: Duna House Barometer
