Investors Dominate the Summer Property Market

The real estate market continues to be summer-like: with extreme holiday season and the changing economic and social environment have resulted in a strong drop in the number of transactions last seen in the epidemic-hit May 2020, according to the executive summary of the latest Duna House barometer.

In July 2022, the property agency Duna House's estimate of 8,978 sales is down 17% on the previous month and 20% on the same period last year. The announcement of changes to the overheads reduction and the continued expectations of a further rise in the interest rate environment have reduced activity in the market, but July's figures suggest that overall, sales closed at an increased pace, particularly in rural areas (29%) and Budapest (44%) – thanks to investor activity as the main reason for buying.

Turnover rate of prefabricated houses is holding up, with only two months needed to sell a rural apartment of that sort and even in the capital, the waiting period for a buyer is not long – with less than 2.5 months needed to successfully close a transaction for a factory-built home.

Second-hand brick apartment sales are also adjusting to the market rhythm this July, with an average of three months to close a contract in the capital, while in the western part of the country and the inner city districts of the capital, the sales of used apartments are taking slightly longer than last year. However, the recently announced government decisions should boost activity in the longer term, according to experts.

Duna House Finances estimates that the mortgage market has also started to decline, with HUF 110 billion of mortgages realized in July 2022, down 17% from HUF 132.6 billion in July last year 132.6 billion last year, and is also 8% behind this year's June estimate.

The government's announcements regarding the phasing out of capped utility prices are clearly having an impact on the real estate market, according to Duna House's July transaction parameters the demand for low-maintenance properties, including small apartments, which can be used as investments, has increased.

In the capital, apartments in the size categories favored by investors (20-40 and 60-80 m²) accounted for 45% of sales on the Pest side. There was also a surge in interest in the inner city districts, which are attractive to investors. After Angyalföld, Erzsébetváros and then Terézváros took the podium in the popularity contest between districts in July 2022.