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Home Prices Falling in Some Budapest Districts

Residential

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The rise in second-hand housing prices in the capital has stopped in all segments this year, with home prices actually decreasing in some districts of Budapest, according to research by Otthon Centrum.

Gábor Soóki-Tóth, head of analysis at Otthon Centrum (OC), said that while the prices of sold prefabricated and brick apartments are still on the rise year-on-year, there is a clear change in the second quarter of this year compared to the first three months of the year.

The price increase in the property market has essentially stopped and prices have fallen in several neighbourhoods and apartment types.

At the same time, the number of sales is lower than in previous years, which means that the average price per square meter in a quarter is strongly influenced by the specific characteristics of the properties sold in that period, such as their condition or the area in which more sales took place in a given district.

According to OC's sales data, the average price per square meter of brick apartments in Budapest was HUF 1.01 million in the last three months, which is 9% higher than in Q2 2022, but 0.5% lower than in Q1 this year. In the period April-June, the highest average price per square meter was recorded by OC in District II, where the average price per square meter of an apartment was HUF 1.44 mln. The Buda district was followed by District V with HUF 1.23 mln, and then district XIII with an average price per square meter of HUF 1.2 mln. On the Pest side, there are no other districts that have exceeded the HUF 1 mln per square meter price, while the average price in the Buda districts (I, III, XI, XII) is HUF 1.1 mln.

Among the districts of Pest, District VI stands out with an average price per square meter of HUF 991,000, followed by District IX with an average price per square meter of HUF 966,000. In the other inner city districts, the price per square meter ranged between HUF 800,000-900,000, while it varied between HUF 700,000-800,000 in the outer districts, based on the second quarter sales contracts, except for Districts XVI and IV, where the price per square meter was HUF 960,000 and HUF, 933,000 respectively.

In most districts, OC measured a change of +/-5% compared to the previous quarter according to Soóki-Tóth, who noted that a significant increase of 20% was only registered in Districts II and XVIII, while in District VII, the average price per square meter increased by 15%, and District XVI saw an increase of 10%."

At the same time, there are also examples of a decline, with average prices per square meter of homes sold falling by 20% in Districts I and V and by 10% in District XI.

"Mainly because exclusive and therefore expensive apartments sold less in the second quarter, the composition effect is more pronounced in the already subdued number of sales," the head of analysis explained the market trends.

Higher unit prices were driven by smaller apartments sold in outer districts, he added.

The price per square meter of prefab "panel" apartments was HUF 741,000 between April and June, up 1.1% year-on-year but 0.8% lower than the previous quarter.

District XI is the most expensive with HUF 890,000 while District IX is slightly cheaper with HUF 869,000 and District XIII with HUF 808,000. The average price of a square meter is HUF 760,000 in the XIV district and HUF 727,000 in Districts III and IV. The other districts are priced between HUF 650,000-750,000 - the average price is HUF 673,000 in District XX and HUF 650,000 in District XVIII. In terms of price, almost all districts were within +/-5% of the previous quarter, and the direction in which they moved was determined primarily by the condition of the apartments sold. A larger change of 6% was recorded in Districts XIV and XVIII, where the average price per square meter for panel apartments fell by that much.

The price per square meter of second-hand houses was HUF 647,000 in Q2 2023. Although this is 7% higher than in Q1, it is just as much lower than in the same period of the previous year.

This trend is mainly due to the aforementioned composition effect: as the interest in second-hand houses has significantly decreased and there are far fewer sales, the average is more influenced by the location or technical condition of the properties within the district, OC's head of analysis added.

In this segment, the average price per square meter in Buda is HUF 926,000 while in Pest it is HUF 570,000. On the Buda side, District III was the most affordable, with an average price of HUF 839,000, compared to Districts II and XII, where the average price per square meter was close to HUF 1 million. On the Pest side, the southern districts are cheaper, for example in District XX, the average price per square metre is HUF 490,000, while in District XVI, the average price per square metre is HUF 668,000.

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