The reason behind this trend is that panel flats are usually 20-25 percent cheaper than brick-built apartments.Continue reading
The Hungarian housing market has been characterized by expanding supply in parallel with declining demand this year, with the result that supply prices have risen only minimally, by one percent in Budapest, and in some places they have stagnated, with the usual upward momentum fading at the beginning of the year. Overall price increases in the first quarter were below two percent, reports Világgazdaság.
The residential real estate market, including the second-hand housing market, is showing an upbeat picture thanks to the turnaround that occurred last year. Since the beginning of 2022, the housing market has been declining, with more than 30 percent fewer second-hand homes changing hands in the first quarter of this year, while supply is gradually expanding, according to real estate website Ingatlan.com.
Following the fall in the last quarter of 2022, house prices rose again in the first quarter of this year, but the usual upward momentum at the beginning of the year has been lost in 2023, according to the data of the Hungarian Central Statistical Office. Average prices per square meter rose by one percent in Budapest and in the county seats. It was only in the smaller municipalities around the capital that prices rose by four percent.
The number of sales has been falling quarter by quarter since the beginning of last year, while the supply of residential property for sale has been gradually increasing.
The decline in the number of sales was to be expected, as the residential property market has been held back by the uncertain environment and high lending rates, said László Balogh, chief economist at Ingatlan.com. He expects between 100,000-110,000 homes to change hands this year, compared to more than 130,000 last year. However, the approaching start of the university academic year should give cause for optimism, with high school students finding out last week whether they have been accepted to their chosen university. This period typically sees a slight surge in the market for apartments for sale and rent, as everyone is looking for housing for themselves if they do not want to live in a dormitory.
The latest figures show that house prices were nine percent higher in the first three months of 2023 than a year earlier.
However, the nine percent annualized increase is a much more moderate pace compared to the 15-25 percent rate in previous years.
In Budapest, the average price per square meter of second-hand apartments for sale was 942,000 forints (EUR 2,400) at the end of July, just one percent higher than in January, according to Ingatlan.com.
The next six months may bring some changes due to the restructuring of housing subsidies.
Thousands of families may decide to bring forward their home purchase this year in order to take advantage of the family housing support (CSOK) and related benefits available until the end of the year in major cities.
The rural family housing support (falusi CSOK) remains, and has been increased, but is only available in small municipalities with less than 5,000 inhabitants. From January 1, 2024, the conditions for the baby-expecting loan will also change, with the amount of the interest-free subsidy increasing from HUF 10 million (EUR 26,700) to HUF 11 million (EUR 29,300). However, married couples will only be eligible if the female member of the couple is under 30 years old at the time of application, or – as a transitional arrangement until December 31, 2024 – if the wife is over 30 but under 41 and can prove her pregnancy.
The housing market is also heavily influenced by the home loan market. New home and consumer loan contracts roughly halved in the first half of the year, writes Világgazdaság. Households signed almost exactly 700 billion forints (EUR 1.8 billion) of new housing and consumer loan contracts in the first six months of the year, just over half of the 1,353.5 billion forints (EUR 3.4 billion) signed a year earlier, according to data published by the Central Bank of Hungary.
However, the first month of summer has already brought a slight recovery in the household credit market. Households and financial service providers signed 53.2 billion forints (EUR 136 million) worth of new contracts for housing loans, which is unprecedented so far this year.
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