The largest price increase occurred in Budapest, where it could reach 80% in some of the popular districts, while in the county seats this increase could be 30-50%. We can ask the question what has led to such a rise in prices. In this article we review the milestones of the past few years of the Budapest housing market.
2013 – The prices are still declining
2013 was the last year when prices had declined in the Hungarian housing market in. In the case of pre-owned homes, this decline was only 3% compared to the previous year for the whole country. At the same time thathis year, though only slightly, but the prices of newly-built housing began to increase (by 0.2-0.3%), therefore the demand for second-hand housing increased. By the end of the year, it generated a 4% increase in demand for housing in total.
2014 – The market awakens
2014 started with the lowest prices in the Hungarian housing market, but according to data from the beginning of the year the turnaround was expected. The earlier assumption was later confirmed, this was the first year when we could talk about a growing housing market, and the trade grew steadily – alongside the prices. The number of pre-owned homes sold increased by 30 %, and the number of the new constructions increased by 10 % compared to the previous year's data. The moderate price increase was 4 % for both new and used homes. If we do not look at just the price change but the average price of pre-used properties was sold, the growth rate was about 7%. The difference between the two numbers was due to the change in the quality composition of the homes sold. Typically more expensive properties were sold during this period.
2015 – The year of the surprise
The house prices increased more than expected generally, but the extent showed a different picture in each region. The rise in prices was the highest in the more expensive areas, the capital was clearly predominant and the change in prices was also significant in the counties of Western Transdanubia. As a result, the price level of pre-used homes also exceeded the 2010 base in the first quarter and exceeded that of the whole year by 4.6%. In 2015, the price of new homes has already exceeded to the 2008 levels, so it reached the pre-crisis level. At the same time, the breakthrough has not yet come in real terms. The prices of pre-used homes have decreased by 20 % - below the pre-crisis levels. The real price change was 11% in case of used properties, while it was 8 % for new real estate.
2016 – The prices are getting away
In this year the real price-increase remained unchanged or even stronger, in the case of the new properties, it is 10%. The prices of pre-used homes were 13 % higher than in the previous year. At the same time, the consistency of the transactions has changed considerably; the countryside (including the smaller towns) has started to flourish: the prices have risen, but these lower-price estates lowered the price increase. Despite the steady increase, the real value of the properties has not yet reached the 2008 level, and both new and used homes have dropped behind by 8 to 10%.
2017 - Has the stagnation started?
Compared to 2016, there was a moderation in price increases. For new homes, a price increase of less than 2% was recorded in the first months of the year, while in the first three quarters the growth rate was 7.8% compared to the previous year. In Budapest, the rate of growth was nearly 12% in the first half of 2017, compared to the previous year. There was also a significant increase in the county seats where 10% was this extent. By region, the Southern Great Plain and Southern Transdanubia were in the second and third place in the price increase, which ranged from 9 to 10%.
2018 – The prices are still high
Based on the recent years, many of us expected that the price increase will slow down in the housing market. Nevertheless, no signs of this can yet be seen. The level of pre-owned home prices was 12.2 % higher in the first quarter of 2018 than in the same period of the previous year. The price level of the new property market increased in parallel with the pre-owned, so in the first quarter of 2018 the price of new properties was 12.4% higher than in the previous year.