Budapest’s housing market is becoming more eventful for used and newly-built homes alike as sales have started to pick up in early 2021. As a result, developers sold more than 1,600 new homes between December 2020 and February 2021, nearly half the total number of new homes sold last year. At this rate, total sales figures may even double this year. As usual, most new homes were sold in Budapest's District 13, but the Inner Pest districts have also attracted large numbers of buyers. Data from the Budapest Housing Market Report by Eltinga and Ecorys reveals the number of new homes sold early this year in various locations.
Compared to previous quarters, the winter of 2021 brought outstanding demand not only for used homes but also for newly built ones.
Between December 2020 and February 2021, developers sold more than 1,600 new homes, roughly equal to the autumn of 2019. For comparison, a total of 3,500 newly built homes were sold in Budapest in the entire year 2020, when some of these homes could still be sold with a 27% VAT, so the first quarter was an encouraging start to the year for property developers. With the re-introduction of a discount VAT rate for homes, the biggest risk factor has disappeared from the supply side, while buyers continue to have to reckon with the economic impacts of the pandemic.
The higher number of newly announced and sold homes has kept the number of currently available homes level compared to the previous quarter at 6,770. Although the number of newly announced homes in the first quarter was the highest for more than a year, relatively high sales numbers led to an unchanged number of apartments for sale.
The biggest projects in Budapest
Although both the 5% VAT and the VAT refund available to recipients of the government's family housing benefit (CSOK), the supply boom seen after VAT was first cut in 2016 has not repeated as developers have probably not started large numbers of new projects due to the pandemic. Construction began on four residential projects of at least 100 apartments early this year:
- Duna Terasz Grande (D&B Real Estate Kft.)
- Ferdinánd Garden (Pesti Házak)
- City Pearl I. (Polat)
- BudaBright residential complex (Indotek)
Under the old rules, virtually all projects started this year could have been put up for sale only at the old, 27% VAT.
District 13 remains buyers' favourite
Following the slump of the previous quarter, by far the highest number of new apartments were sold in Angyalföld (outer District 13), with the 626 homes sold accounting for nearly 40% of the Budapest total.
Excellent pre-sales in newly launched residential projects Duna Terasz Grande and Ferdinánd Garden have contributed to the high number. Sales compared to the previous quarter rose by 50% in District 11, 30% in Outer Pest and 20% in Inner Pest, while the figure remained unchanged in other parts of Buda.
The most popular area after District 13 was Inner Pest, with 333 new apartments sold, as projects in Districts 8 and 9 have apparently gained in popularity following a nadir last summer.
