The number of sales in the housing market reached a five-year high in January. It was already cheaper to get an apartment in downtown Budapest than last year, and the price of panels in Buda also decreased.
More than 11,000 residential properties changed hands in January this year, which means that 2021 has brought the strongest start to the year for the housing market in the last five years, according to an analysis by Duna House. The upswing is not unexpected, as towards the end of last year, both buyers and sellers were already more likely to wait out this year for home-building subsidies available, and it wasn’t until this year that they hit stores. According to Duna House, the effect of home creation subsidies can last all year round, so the number of sales can rise to 130-150 thousand by the end of the year. However, the coronavirus has quite rearranged the market; more and more analyzes are drawing attention to the fact that due to the pandemic situation, customers are looking for something different and elsewhere than before. One of the most spectacular changes was the disappearance of foreign tourists, especially in the capital’s real estate market. Really residential buyers were finally blown away by the reset of short-term housing expenditure, as investment purchases in Budapest fell sharply. While a year ago almost half of the customers set this goal, now only 38 percent of them. The proportion of those who bought their first home, meanwhile, jumped from 21 to 31 percent. In rural areas, such a trend reversal is not yet visible, in fact, this year even slightly more people bought an apartment for investment purposes than a year ago. The leading reason in rural areas is still moving to larger properties, while the proportion of first home buyers has fallen from 30 per cent to 25 per cent last year. In this situation, house prices in downtown Budapest also started to fall: the average price per square meter decreased from HUF 819 thousand a year ago to HUF 812 thousand, and the bargain rate increased from 3 to 6 percent. All this so that the offer price originally indicated was already 7 percent lower by the sellers until the appearance of the potential buyer candidate, and an additional 6 percent was released from it. According to the analysis of Duna House, the strength of the buyer position in the whole capital is shown by the fact that the properties were sold 10-13 percent cheaper than the announced price. However, the average prices per square meter did not go down in the whole capital: although the price of panels fell by 10 percent in Buda, the panels in Pest and the used brick flats in Buda were 8-8 percent more expensive. This meant HUF 562 thousand for panels in Buda, HUF 895 thousand for brick flats and HUF 512 thousand and HUF 623 thousand in Pest in January. National house prices, meanwhile, are still rising in almost all categories in both the East and the West: panel prices have risen by 4 per cent in the East, 11 per cent in the West, brick flats by 19 per cent in the West and the same in the East. Residential real estate across the country was harder to sell: the average sales time in January had risen to 106 days, or about 3.5 months, compared to 2-2.5 months last year. Thus, the average sales time in the country increased almost without exception: after 2-2.5 months last year, we had to wait at least 106 days for a sale in January. The most striking change in this area also took place in downtown Budapest, where sales time increased from 123 days last year to 196 days. Perhaps this is also due to the fact that investors are not making much of an effort to get rid of their properties yet, and in Budapest the proportion of those selling their previous investments has decreased from 10 percent to 6 percent. Meanwhile, the growing demand for detached houses has been amplified by the epidemic for years: today every second buyer is looking for a house with a garden, although in 2016 only one in three wanted to buy something like this – this is already clear from the real estate.com analysis. The garden houses will be sold out much sooner: in Budapest last year it took another 140 days to sell, but the family houses sold in January found a new owner in 109 days. The sales time of used brick flats, meanwhile, increased to 111 days, compared to the 60-90-day average of previous years. In other words, houses in the capital are now selling sooner than brick flats, and this has never been seen before in the Budapest market, pointed out László Balogh, senior economic expert of ingatlan.com. At the same time, the fastest panel flats can still be sold in Budapest, which takes an average of 89 days. According to László Balogh, the growing popularity of houses for sale is partly due to the fact that from the second half of 2019 the proportion of investors among buyers will continuously decrease, and they will buy the largest share of condominium apartments. Due to access restrictions and the home-office, meanwhile, residents are increasingly looking for properties with their own gardens and larger floor space. In rural areas, however, the situation is still reversed: in the case of detached houses sold this year outside the capital, customers had to wait an average of 151 days, while in the case of flats it took only 111 days. In the housing market outside the capital, terraced houses can be sold the fastest, in 63-80 days.
The study is already part of the offer
On the supply side, there were already clear signs of adaptation to the viral situation – Dávid Valkó, senior analyst at OTP Ingatlanpont, pointed out. In the case of larger newly built flats, the room that originally functioned as a bedroom is more and more often marked as a study on the floor plan, but in the case of smaller flats as well, it can be important to create a work area that can be separated from the rest of the apartment.
Source: Népszava by nepszava.hu.
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