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1024 Budapest Hungary
Attorney's phone number Tel.: +36 1 316 9233
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Attorney's office e-mail info@drlittner.hu

Property market records in 2020

napi.hu, 04.01 – The property market may have stalled in 2020 but the quickest sales still happened within a single day: in Budapest a 200 square metre detached house in District 22 was sold for HUF 38.9 million within 24 hours in May 2020. Another detached house with a floor space of 110 square metres and two bedrooms on a 1000 square metre plot in Hajdúböszörmény was also sold within a day. The priciest residential property of Hungary at the moment is a residential palace on Andrássy út: its 2000 square metre, luxurious living space is located on a 1000 square metre plot and it is on the market for HUF 6 billion. The most expensive concrete block apartment was sold not in Budapest but in Siófok at Lake Balaton: the 79 square metre property fetched HUF 74 million. The least expensive home on sale, a 60 square metre derelict clay house on a 600 sq. m. plot in Négyes, a small village County Borsod, was offered for sale for HUF 300. The cheapest apartment of 2020 is on the market in Salgótarján for HUF 600,000.

Real estate market recovered

napi.hu, 06.10 – According to Q3 2020 data the real estate turnover in the Hungarian market has already recovered. Judged by the analysis of a major real estate agency the number of sales in these three months was the same, about 38 thousand, as in July-September last year. The company expects a balanced market in the last quarter of the year and the same activity as last year, which could mean 34-35 thousand sales.

According to data published by the company, 2,708 properties changed hands in September nationwide, and buyers took out residential mortgages worth HUF 75 billion. Although real estate sales fell short of September by about 5 percent year-on-year, the entire quarter saw no sign of the previous decline, and the market now shows the intensity of a year ago.

According to the company, the mortgage loan market is also showing signs of recovery, as the estimated volume of HUF 75 billion is the same as last year’s central bank data, and the market performed well on a quarterly basis, too. In the third quarter of this year, people spent a total of nearly HUF 225 billion on housing loans for residential purposes, based on estimates and central bank data.

Pandemic catches up with residential property market

napi.hu, 24 March – The Coronavirus hit the property market in a period of consolidation and its effects will undoubtedly depend on how fast and effectively the individual governments respond to the pandemic. There is a suggested (and not obligatory) quarantine, i.e. people tend to stay at home which resulted in a reduction of propensity to buy and even the number of property visits by 60 per cent compared to previous months. However, urgent sales transactions are still completed rapidly. The effects of the new virus are mostly felt in Budapest – there are significantly less inquiries. In the country, on the other hand, the market is still seeing some brisk activity and there are almost no signs of a panic. That said, the situation is changing rapidly in response to the latest news and government measures. During first couple of weeks of the month we were witnessing the usual March market slowly waking up from its winter sleep. Last week, however, the number of new inquiries suddenly fell by more than 60 per cent and also the volume of new assignments given to property agents has fallen by 30 per cent.

Coronavirus: a new age dawning on the property market

Napi.hu — The Coronavirus pandemic and the declaration of state of emergency have brought about an almost instantly perceivable change on the property market, too. There are no signs of a wide-spread and significant price decrease as yet, but there may be more and more “good buys” appearing on the market in the near future.

Personal visits will be replace by informative and relevant online advertisements and the role of real estate agents will gain importance, too.

Demand has decreased over the past few weeks but supply has increased. Also, buyers have a wider bargaining span because those who really want to sell their properties can count on 10-15 per cent less potential buyers than before the crisis.

Another reason of the decrease in demand is that some buyers postpone their purchase and “rubbernecks”, who have less serious purchase intentions, may also vanish from the market. Those who are still in the market as buyers have serious intentions and strive for a quick and effective transaction.

Apartment market: price hike stalled?

Napi.hu, 30 April 2019 – Although the annual rate of increase of apartment prices has fallen, there is still a significant hike exceeding 20 per cent in Budapest, according to the latest survey published by the National Bank of Hungary.

In Budapest, the Q4 2018 the annual acceleration rate of prices was slightly slower but still strong at 22.9 per cent. The latest apartment price index shows a slower nominal annual rate of increase of 18.2 per cent for country towns, which exceeds the figure for the previous quarter.

In small settlements, the nominal price hike was 2.3 per cent, 13 percentage points less than the national average, which indicates a further increase of the difference between smaller and larger settlements.

That said, according to the summary report published by the National Bank of Hungary, the nominal price increase was only 0.2 per cent on average in the fourth quarter of 2018, while the annual rate of increase was 15.2 per cent, compared to 16.2 per cent in the previous quarter. The national average of apartment price increase was 11.6 per cent. In Q4 2018 the national average of real price increase was 11.6 per cent.

Budapest residential property market may slow down

Napi.hu, 30 July 2018 – In the first half of 2018 there were 6517 apartments built in Hungary, 30 per cent more than in the same period of the previous year. The number of residential units under planning was 18,066, 8.9 per cent less than in the first half of 2017. The number of planning approvals issued in Budapest decreased by 27 per cent. 50-50 per cent of residential properties are still built by private persons and companies, respectively.

54 per cent of apartments created in a new building are located in houses, 36 per cent in condominiums and 6.2 per cent in gated residential communities.

The average floor space of apartments is 101 square metres, an increase of 5 square metres from the previous year. The number of apartments planned reduced by 27 and 3.5 per cent in Budapest and in county centres, respectively, and increased (by 17 per cent) in other towns and cities only.

Warning signs on the apartment market

napi.hu, 23 July 2018 – Demand is still soaring on the market of new apartments but price hikes stole some of the impetus. According to the CEO of a major property agency there are still approximately 7-10 thousand apartments sold in Budapest annually but the average time needed to sell a property has increased as a result of the higher prices.

According to market experience HUF 30 million is a dividing line: more expensive properties take longer to sell.

The low VAT resulted in neither overdevelopment nor oversupply and apartments in the process of building sell within a year maximum.

Some analysts expect a small supply increase after 2020 and also a stronger demand for pre-owned apartments.

Government super weapon apparently missed its target

napi.hu 4 July 2018 – The end of the preferential 5 per cent VAT rate will put an abrupt end to the housing boom and result in a brutal price increase of newly-built apartments. The almost 25 per cent price hike will have a serious effect on instalments paid for new apartments, new construction projects and on new developments after 2020, said to portfolio.hu based on a radio interview with Mihály Varga finance minister.

Varga reminded that the term of the Preferential VAT Act runs between 2016 and 2019 and that the government decided to forego significant tax income to further its demographic goals. However, 10 per cent of new apartments are bought by foreigners in Budapest, which means the benefit is exploited by real estate investors which is not what the government was aiming to achieve.

How long can the rally last?

napi.hu 15 January 2017 – Hungarian construction industry output is growing fast. According to market analysts, however, the number of restrictive factors is growing, too. A poor 2016 performance meant a very low base which supported a spectacular relative increase in 2017. Development projects financed by the EU and residential construction drive the industry forward. Growth is set to continue in the next few months: the volume of orders in November was 110 per cent higher than a year before. That said, a lack of workforce and the resulting increase of expenses pose significant problems for construction companies. Also, the future of the discounted VAT rate levied on residential projects is still not clear and if the reduced rate is cancelled the willingness to start new projects may decrease.

Residential property market report

napi.hu, 12.05.2017 – According to a recent residential property market report published by MNB, the National Bank of Hungary, prices in Hungary grew by 15.4 per cent on average last year. This increase can continue at a more subdued rate in 2017. Budapest witnessed the highest increase with 22.5 per cent, which is, however, still lower than the 25-30 per cent seen in previous years. Domestic residential property market is still shaped by rising prices and a growing turnover, and the supply side responded to increased demand with a significant boost of construction activity. The report, which was published for the third time this year, says the increase in demand was supported by favourable household income and labour market trends and low interest rates. MNB experts say neither the increasing volume of residential loans nor the growing average apartment prices are a sign of overheating.

Residential Property Market Slowdown

napi.hu, 04.05.2017 – According to the estimate of a major property agency a total of 10.6 thousand apartments changed owners in April, 16 per cent less than a year ago. Poor weather and the Easter holidays were bad on the property market which, following the boom in March, closed with significantly more modest numbers in April. That said, 10,575 transactions are still one of the highest figure since last summer though, despite being 16 per cent less than a year ago, the survey says. According to the agency’s estimate 40,175 properties were sold in the first four months of the year, 13 per cent less than the 46,000 transactions recorded in the same period of the previous year.

Decreasing apartment prices on the horizon?

napi.hu, 29.11.2016 – There are signs of slowing of the property market, not only in downtown Budapest but in the outlying districts such as South-Pest, too. Prices are stagnating but experts believe they may even start to decrease in the near future. Real estate agents agree that the selling price hike has stopped and is hovering at previous, high levels, but any further growth of supply may result in lower prices. One source of such growth could be the consequence of the exchange rate limit that may increase the monthly instalments of loans denominated in a foreign currency and this, in turn, can force owners to offer their properties for sale. This could bring about a price drop of 5-10 per cent. However, the bargaining margin has not increased yet. Owners of condominium apartments seem very tough negotiators and are not prepared to give discounts exceeding 5 per cent. For detached or semi-detached houses buyers can achieve a little more: 5-12 per cent.