There are soaring real estate prices in Hungary, according to the data of the Central Statistics Office (KSH). In the first quarter of 2022, real estate prices continued to rise: newly built flats cost 19 percent more while used ones cost 20 percent more than a year before. At the same time, according to Eurostat data, Hungary had the steepest price increase compared to the average price in 2015 among EU member states.
During the last seven years, the Czech Republic is the other European country where real estate prices increased the most. All in all, in the 27 Member States of the European Union, the average price increased by 45 percent.
Regarding the Hungarian market, the hilly districts of Buda in the capital were the most expensive. The average price here rose to HUF 72.9 million (EUR 185,000) from HUF 66 million (EUR 167,000) a year earlier.
If we look at rural cities, prices per square meter increased at a higher rate than in the capital.
The highest prices appeared in Székesfehérvár, 70 kilometers West from Budapest, in Győr, which is close to the Austrian border, and in Debrecen, in the Eastern part of Hungary. These rural big cities are all county capitals, a fact that contribute to the prices.
Meanwhile, in the banking sector, banks are trying to win the race for the increasing number of housing loan clients. According to an article by Index, a Hungarian news portal, comparing the central bank’s statistics with market data, it looks like average taxpayers can already take out a mortgage at a lower rate than the standard interest rate advertised for the best borrowers. The reason behind this is that
there is a race to attract a dwindling number of customers, so banks are offering individual interest rate discounts to help them achieve a repayment rate that still allows them to conclude a loan.
Experts at money.hu, a financial website, are saying that due to inflation and previous interest rate hikes, there is a decline in the demand for housing loans. Still, domestic banks are trying to maintain this demand by decreasing the average interest rate below the announced levels.
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