Housing Market: Subdued Demand, Booming Investor Scene

With subdued demand, the housing market ended October as the weakest month this year in Hungary. The 8,326 sales estimated by the nationwide real estate network Duna House were down 9% on the previous month and 28% down compared to October 2021.

Rising lending rates and concerns about the energy crisis have made more and more buyers hesitant to buy and to seek financial assistance, and many are able to take out less credit than they need. As a result, Duna House experts expect a weaker final quarter in the changing real estate market, where sellers and buyers will need even more expert help than ever before.

All the existing home-building subsidies will certainly be available by the end of the year, but even this is unlikely to compensate for the slowdown in demand caused by the changing economic situation. The financial difficulties are also underlined by the Credipass mortgage forecast. The estimated HUF 68 billion mortgage lending for housing in October represents a 37% year-on-year decline and a 17% weaker monthly figure compared to September this year.

The shrinking buyer presence nationwide is being offset by an increase in investor activity. The strengthening investor sentiment is underpinned by the fact that more than half of all transactions in October were in Budapest and nearly in the rest of the country, was driven by investor motivation on the buyer side. Investors in both the capital and the countryside are signing up for properties averaging 60 sqm, while rural investors are spending less than half of what Budapesters are spending, HUF 23.4 million on average.