Since we leave a lot of a year behind in the capital’s housing market since the virus appeared, it can be interesting to compare and compare what trends can be observed compared to the previous ones in many ways.
We looked at the characteristics of house prices in Budapest at the end of last year and how local rental prices have developed compared to previous years, and we also made a forecast at the beginning of a short year as to what will determine the real estate market in 2021.
Why can we buy an apartment in the capital?
Entering 2021, we conducted a review of how brick and panel apartment prices in the capital developed in the last quarter of 2020. The graph based on the statistics of Ingatlannet.hu shows that in the last three months of last year only minor changes took place.
In October, brick flats could be bought at an average price of HUF 828 thousand per square meter, while prefabricated flats were HUF 263 thousand cheaper per square meter, ie HUF 566 thousand / sqm. So, if we take a 50-square-meter apartment as a basis, then in the case of the former it was possible to buy around HUF 41 million, while in the case of the latter it could be bought in Budapest for HUF 28 million, if we do not take into account the deal.
The following month saw a slight increase, the price of brick flats increased by only HUF 34, while the price of panels per square meter increased by HUF 1,876. We closed the year with similar values, as brick flats could be purchased for around HUF 41.7 million at a price of HUF 834,376 / sqm, and panel flats at a price of HUF 569,104 per square meter for around HUF 28.5 million in the capital.
Will apartment prices in Budapest continue to fall?
We also found it interesting to examine how the rental prices in Budapest have changed in the last 5 years, from 2016 to 2020.
In 2016, it was possible to rent an apartment in the capital at an average price of HUF 3,017 per square meter. There was no significant increase for the following year, 2017, as at that time flats were issued for an average of HUF 3,042 / sqm in Budapest, ie the difference was HUF 25. However, 2018 and 2019 have already brought much larger price increases in the local rental market. In the case of the latter, the monthly house prices increased by HUF 311 to HUF 3,353 / sqm, while the following year the increase was another HUF 418, so in 2019 the average apartment prices in Budapest were HUF 3,771 / sqm. This means that in 2018, an average 50 square meter apartment could be rented for about 168 thousand forints a month, and a year later, flats of the same size were issued for an average of 189 thousand forints.
Surprisingly, however, last year there was a decrease in the area of apartments for rent, as in 2020 the average monthly rent was HUF 3,429 / sqm, which was HUF 342 cheaper than last year.
What does the year 2021 hold for the real estate market?
Speaking of the year 2021 ahead of us, a long-unseen renovation boom is likely to begin in the real estate market. About 14% of Hungarian households plan to carry out housing renovation works this year. In addition, the 5% housing tax regulation will start this year, and from now on properties purchased with CSOK will be exempt from tax.
The growing prevalence of teleworking can also be an interesting change, as home-based workers will need a well-designed property that is suitable for such work. This will certainly have an impact on house prices, as while more expensive real estate has so far been concentrated in the capital and big cities, mainly due to well-paying job opportunities, the proximity of jobs is now gradually losing importance with the spread of the home office.
According to forward-looking estimates, these regulations and changes in living conditions will all give many residents a reason to buy real estate. However, it should be noted that uncertainty is still high and is likely to be weak in the housing market in the first quarter of the year, yet we can expect it to strengthen, so it is worth keeping an eye on how much and how real estate prices will change.
Source: Ingatlanhírek by ingatlanhirek.hu.
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