Stagnating House Prices in Budapest

According to the latest house price index data by the National Bank of Hungary (MNB), house prices grew by 8.3% in Budapest in the period between 2019 Q1 and 2020 Q1. House prices were unchanged in Budapest quarter on quarter.

As a result, this was the second consecutive quarter when house prices did not rise in the capital. In rural cities, annual nominal growth in house prices was 14.8%, representing a 5.7 percentage point decline relative to the year-on-year rate recorded in the previous quarter.

Rural house prices rose by 3.5% quarter on quarter. In municipalities, house prices fell by a 3.5% quarter-on-quarter rate in nominal terms and rose by 7.8% year on year.

Although slowing, house prices continued to grow at double-digit rates in all regions of Hungary year on year. In nominal terms, the most pronounced annual increases in prices were recorded in Central Transdanubia, the Southern Great Plains and Southern Transdanubia. In these regions, house prices increased at rates exceeding 15% relative to 2019 Q1.

House prices rose by 14.7%, 13.7%, 12.5% and 10.8% year on year in the Northern Great Plains, Northern Hungary, Western Transdanubia and Central Hungary, respectively. House prices grew in all regions of Hungary quarter on quarter as well.

The aggregated MNB House Price Index, presenting changes in average house prices in Hungary, rose modestly, by 0.9%, in nominal terms in 2020 Q1. By contrast, the annual nominal growth rate slowed from 17.8% in the previous quarter to 11.6% in 2020 Q1. In real terms, the annual growth rate of Hungarian house prices was 7.0%; however, there was a quarter-on-quarter decline of 0.6% in the period under review.