Housing prices rising in Budapest

Hungary real estate market is seeing an increasing trend in housing prices, after 2014 pre-crisis levels with increasing number of foreigners buying property in the capital. Hungary early in 2017 closed the residency bond program granting permanent residency to third country nationals, but this scheme does not involve the property market.

According to Global property guide, Hungary is in the fourth year of a continuous house price boom.  While by 2015 property prices had already matched pre-crisis levels in nominal terms – a year when property prices rose 14.69% across Hungary and rose a nominal 24.44% in Budapest.  “Rising real income and favourable labour market conditions contributed jointly to the improvement in long term income expectations which are of key importance in terms of housing investments,” said the MNB’s Housing Market Report in May 2017

According to MNB Housing Market report

The Hungarian housing market shows a heterogeneous picture both in geographical terms and based on the size of settlements. After the turnaround on the housing market in 2014, the strongest growth was experienced in Budapest, both in terms of market turnover and house prices, but starting from 2017 different trends have been observed.

• In 2017 a total of 3,200 new homes are expected to be completed and delivered in Budapest,
• Based on preliminary data, in the first half of 2017, 280 about 81,000 sales contracts were concluded.
• The level of house prices in Budapest substantially diverged 160 from the price level observed in the rest of the country.
• Over the last three years, the annual nominal growth rate of house prices in Budapest was 21 per cent on average.
• The average square meter price of used homes sold in Budapest in the first half of 2017 already reached HUF 400,000
• On an annual average, the disbursement of new housing loans rose by 34 per cent.

In the first half of 2017, the typical average square meter prices were HUF 308,000, HUF 294,000 and HUF 236,000 in the county seats, towns and villages, respectively. In Budapest, new home prices peaked 500,000 HUF while used homes were priced at 400,000 HUF per square meter.

In the first two quarters of 2017, the average price of second-hand homes sold in Budapest was HUF 22.6 million, HUF 1.4 million more than in 2016.

In 2016, the average square meter price of second-hand dwellings sold in Budapest was HUF 361,000, which reached 402 thousand in the first two quarters of 2017.

According to Hungary central statistics office report on housing prices

• In the first half of 2017, housing market turnover continued to grow. In the first two quarters, nearly 5% more homes changed hands than a year earlier.
• The prices of second-hand homes increased by 3.1% in the first quarter of 2017 and by 2.1% in the second quarter.1
• The price of new homes also rose: the rise in the price level was 4.9% in the first quarter and 3.2% in the second.  The price of new homes sold in the first half of the year was 8.2% higher than in 2016. This represents a 19.5% increase compared to the base for 2015.
• In the first two quarters of 2017, 55.4 thousand homes were sold, exceeding the housing market turnover of the same period of the previous year.
• The price level in Budapest continued to increase compared to the national averageIn 2017, the structural rearrangement of the housing market continued, as a result of housing policy measures, real estate market turnover recovered in smaller settlements particularly hit by the crisis.