The first quarter of this year saw a rise in annual house prices on the Hungarian market, but the second quarter lost momentum. According to the latest analysis from zenga.hu, listing prices for residential properties are still 14 percent higher year-on-year, but this is a slowdown compared to the 20 percent growth in the first quarter. On a quarterly basis, prices rose by just 0.3 percent, meaning that nationwide the increase has essentially stopped.
The annual price growth rate slowed almost everywhere compared to the previous quarter, particularly in the more expensive Budapest districts and western Hungarian county seats. In the capital, the annual rate of price growth is now only 8 percent, while in District XII the average listing price is currently lower than a year earlier. "This does not mean a real price drop, but is mainly a consequence of the fact that the share of properties needing renovation and in average condition increased in the supply there, while fewer new properties appeared," said Péter Futó, head of analysis at zenga.hu.
While the market is slowing nationwide, some regions continue to perform strongly. Szolnok and Miskolc show high price growth, where the share of new and near-new flats grew from a low base last year. Since new flat prices – especially in cheaper regions – are much higher than for used ones, more of these coming onto the market pulls the average up. "Similar reasons lie behind the standout price rises in Borsod-Abaúj-Zemplén and Jász-Nagykun-Szolnok counties, but in these regions last year's price surge also started later than in Budapest or the most sought-after regions, so the catch-up continues," Futó added. Around Lake Balaton, by contrast, a fall in demand is now clearly felt.
The national average listing price per sqm including Budapest was HUF 985,000 in the second quarter, reached outside the capital's districts only by Debrecen (HUF 1.088 million/sqm) and Szeged (HUF 1.021 million/sqm), with Veszprém (HUF 984,000/sqm) just behind. In Budapest, the top segment again featured the usual four districts (I, II, V, XII), with District I overtaking District XII. In the most expensive District V the average is HUF 2.214 million/sqm. All Budapest districts now have average listing prices of at least HUF 1 million/sqm.
Demand has also lost momentum. "The second quarter brought weaker activity compared to the start of the year, which may reflect a wait-and-see attitude around the elections, the seasonal effect of the Easter period, and the gradual winding down of the Otthon Start programme," said Futó. According to zenga.hu, while there is no talk of price falls nationally yet, the second quarter clearly shows that the earlier rapid rise has stalled. In the coming quarters, local market conditions will increasingly determine where prices keep rising and where longer-term stagnation may begin.
