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.
Huge price increases around Lake Balaton
napi.hu 29. June 2018 – At present, holiday properties in County Veszprém are the most expensive, while County Zala shows the steepest price hikes and County Somogy boasts the most construction projects on the shores of Lake Balaton. Prices increases are exceptionally high in all three counties because new developments have been rearranging the market. Residential property prices around the lake have also been increasing continually. Back in spring 2015 average prices were approximately HUF 223,000 while in the second quarter of 2018 they were around HUF 335,000.
Property developers have been turning their attention to the region in the past few months. This is one of the reasons why County Veszprém and Somogy left County Zala behind: the latter has only started to draw developers recently. Prices in Somogy and Veszprém were more or less in synch up until the second quarter of 2016, but in County Veszprém there was a big bang in the second half of 2016, owing to new residential and other development projects. By 2018 the difference diminished because some large scale development projects had started in County Somogy, too (most notably in Siófok, Zamárdi, Balatonlelle, Fonyód and Balatonszemes).
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.
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.