Falling House Prices in Budapest

House prices fell by 5.6% in the second quarter of the Hungarian capital. Consequently, prices fell by some 2.5% compared to a year earlier, the National Bank of Hungary (MNB) reports.

According to the latest MNB house price index data, house prices in Budapest declined year on year in nominal terms, which has been unprecedented since 2013. In Budapest, house prices declined by 2.5% between June 2019 and June 2020. There was a quarter-on-quarter decline of 5.6% in house prices in the capital in nominal terms, reflecting a fall of 6.6 percentage points relative to the price changes in the previous quarter. In rural cities, the annual nominal growth in house prices was 7.3%; however, there was a slight decline of some 0.8% in prices on a quarterly basis in rural cities. In municipalities, house prices rose by a 13.7% quarter-on-quarter in nominal terms and by 13.8% year on year.

Although slowing, house prices continued to grow at positive rates in all cities in the regions of Hungary year on year. The most pronounced annual increases were recorded in the cities in Southern Transdanubia, Central Transdanubia, Western Transdanubia and Northern Great Plains. In these regions, there was an increase of over 7% in prices in nominal terms relative to 2019 Q2. Year on year, house prices rose by 6.2% in the Southern Great Plains and Northern Hungary. In Central Hungary, the increase was 1.8%. In the northern and central regions of Hungary, house prices in cities fell quarter on quarter. Prices were stagnant in Western Transdanubia and in the Southern Great Plains and the Southern Transdanubia they rose somewhat, the report states.