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1024 Budapest Hungary
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This is how crime rate affects apartment prices

In theory, there is a strong correlation between the crime rate and the property prices of a neighbourhood: security has a well-defined market value. However, in reality this relationship is not that straightforward: “As ever so often, the devil is in the details”, a property market analyst said. 60-70 per cent of the price of an apartment depends on the property’s physical parameters and the rest comes from the quality of the neighbourhood and the quantity and quality of services available locally. Crime and security have a strong influence, but we must also consider what type of crimes the statistics mention.

For example, although according to data published at www.police.hu the crime rate per 1000 inhabitants is the highest in downtown Budapest, apartments here are still some of the most expensive ones in the Hungarian capital: the average offering price of HUF 515 thousand in 2014 increased to HUF 862 thousand by 2016. The districts most severely hit by burglaries are the central ones in Buda (with the exception of District I.), and although the number of reported cases sank by 30-50 per cent in all of them, burglaries are still very frequent compared to the number of inhabitants.

Apartment buyers deterred by prices

napi.hu, 06.04.2017 – According to the transaction volume estimate of a large Hungarian property agency 11 560 apartments changed owners in March in Hungary. March was a strong month on the property market, far stronger than the second half of 2016, even considering the 7 per cent backlog compared to the same month of last year. The recoiling was caused by the earlier surge in property prices which forced the market to take a deep breath while potential buyers waited to see where prices were going next.

March transaction volumes and indeed the increased demand in February indicate a return of buyers to the market, which means the wait for lower prices is over. This is also supported by the increasing proportion of buyers purchasing for themselves as opposed to investors. In total, there were 29.6 thousand property sales transactions completed in the first quarter of 2017 in Hungary. In 2015 and 2016 the same figure was slightly over 30 thousand, while in 2013 it was a mere 18 thousand.

Experts expect a boom in apartment construction

napi.hu, 03.04.2017 – According to experts the number of apartments constructed this year may rise significantly, but a change in VAT legislation and the lack of skilled workers may have an unwelcome effect on the construction industry. A recent survey showed that the number of condominium apartments completed this year will reach 2010 highs, but even last year’s 10 thousand was a four-year record. Experts base their estimate on the number of planning applications mainly in the periphery of Budapest, in larger Hungarian towns and in the vicinity of Lake Balaton, mainly as a result of the 5 per cent VAT. This VAT rate will probably be in force until 2019 only, so – due to the time requirement of planning permission procedures – developers have only one year left to start new projects.