The changing economic situation is also affecting the real estate market. The Duna House Demand Index showed a steady decline in the second quarter of the year, with the number of transactions also lagging compared to the same period last year. However, price growth did not stop, and all price indices increased in nominal terms compared to the first quarter of the year.
The property agency's report points out that again, the strongest increase was recorded in concrete block indices, interestingly with brick and mortar apartments in Budapest showing a minimal decline in real terms.
According to the executive summary of the report, the 10,859 sales estimated by Duna House for June 2022 show a weaker turnover compared to May and the same period of the previous year. This is confirmed by the Demand Index, which stood at 62 points in the last month of the quarter. In recent years, the epidemic situation and the related restrictions have reduced the demand for travel, so that even during the pandemic years, with the end of the school year, buyers were more active.
This year, however, we are already seeing the arrival of a real summer in the property market. The first half of the market closed with nearly 75,000 transactions, a 10% decline compared to 2021 and a 25% increase compared to the pandemic year of 2020. Experts expect a more subdued real estate market in the second half of the year due to the rising interest rate environment, which could mean more help will be needed by both sellers and buyers.
There was a downward trend also in the mortgage market in June, thanks, among others, to the phased out volumes of Green Home Loans. Duna House estimates that June’s 120 billion housing loans contracted are less than in the the previous month and the same period last year, but on a half-yearly basis the factual figures published by the National Bank of Hungary (MNB) for the first four months and Duna House’s May and June estimates indicate a 26% increase compared to H1 2021.
In the changing interest rate environment, it is no longer common for customers to choose mortgages with a term shorter than 5 years. The proportion of loans with a 10-year fixed rate or more is the highest, at 85-90% nationally. In Budapest, the average loan size is mostly north of HUF 20 million, while in rural areas less is enough to buy a home. 25.2% of borrowers also applied for the Family Home Allowance (CSOK), which is a 7 percentage point drop in popularity compared to the previous quarter.
Along with an increasing turnover speed the market is still characterised by rising prices, with transaction data showing that the more expensive properties above HUF 40, 50 and 70 million dominate the market at a national level. In Buda, 56% of properties sold were priced above HUF 900,000 per sq. m., while in Pest one-third of transactions fell into this price range. Unit prices in County Pest were also in the top group, with 32% of sales transactions concluded at prices reaching or even exceeding HUF 600,000.
The trend varies by property type, with brick and mortar home prices falling in the East and West of the country, and showing a 22% rise in Buda, but concrete block homes rising by a record 25-36% across the country and in the capital, too, compared to the previous quarter. New-build properties have not become cheaper in the last quarter either, with the price per sq. m. of new homes exceeding HUF 1 million in 13 districts of the capital. Most of the apartments are on offer in districts 9, 11 and 13, with 73% of the apartments in development projects coming on the market sold almost immediately in the second quarter of 2022. According to current data, 4300 properties are still waiting for a new owner.
Leave a Reply Cancel reply
Top 5 Articles
- Hungarian Inflation Rate - the Highest in Europe December 16, 2022
- Sharing Business Experience December 10, 2022
- In Strategic Partnership with the Client January 2, 2023
- Customer Focus Above All January 6, 2023
- Future FM, the Solution Provider January 4, 2023
Articles by Date
- ► 2023 (600)
- ► 2022 (1249)
- ► 2021 (941)
- ► 2020 (899)
- ► 2019 (237)
- ► 2018 (161)
- ► 2017 (310)
- ► 2016 (279)
- ► 2015 (324)
- ► 2014 (229)
- ► 2013 (233)
- ► 2012 (250)
- ► 2011 (303)
- ► 2010 (167)
- ► 2009 (43)
- ► 2008 (3)
No comment yet. Be the first!