The Housing Market Took a Spring Break in April

April brought a temporary downturn in the domestic real estate market in Hungary, with a thousand fewer transactions compared to the previous month, according to the latest barometer report published by the real estate agency Duna House.

Based on Duna House's own data, the number of sales nationwide was estimated at 6,787, which is still down 37% year-on-year and 13% weaker than this year's strongest month, March. However, activity in the mortgage market continued to pick up, with April HUF 42 billion in domestic data from the group's international financial brand, Credipass.

It is a 6% increase on the previous month's estimate, but still significant, 71% decrease compared to the National Bank of Hungary data of April last year. The holiday and spring slump is expected to be temporary and not unusual when looking at longer-term trends in the housing market, with May real estate brokerage experts expecting an upward trend again in May, while financial experts also forecast increased activity in the second quarter.

Although the real estate market closed the month with a lower number of transactions than in March, the segment did not perform worse in terms of interested parties, with April's demand index one point higher than the previous month, at 69 points. However, there is still a significant gap compared to previous years, but in a year of pandemic April performed better than the extra decline seen in the pandemic.

Compared to previous months, there has been a significant shift in interest in the capital's districts survey among Duna House customers. District XIII tops the list, but the popular inner-city districts of Terézváros (District VI) and Erzsébetváros (District VII) have been pushed down from the podium. Újbuda (District XI) was the second most sought-after district among the interested parties, followed by District II.

April was also a busy month for price changes per square meter, with price reductions reaching the Buda side and the Pest side of the city. The average price per square meter in these areas fell below one million forints last month, according to sales data. The change in the guide price was 4% for this property type in the whole of the capital, owners were also willing to lower the selling price by 5% in the bargaining process. In rural areas the bargaining rate was 6%.

Compared to the same period last year, there was a slight increase in the average price per square meter of flats in the countryside and on the Buda side of the capital, but prices in the residential areas of Pest decreased. In the capital, owners of Buda prefab building apartments reduced their prices by an average of 5% during the advertising process, while in Pest, a 4% change in the guide price was realised during the advertising process. The bargaining rate in the capital was between 3% and 5% for this property type, while in the countryside this margin was 8%.