Published: November 25 2023
The Hungarian real estate market is facing challenges due to shifts in economic conditions and a decrease in housing construction. However, there are also potential opportunities for homebuyers and promising developments in the market.
Economic Impact on the Housing Market
The housing market in Hungary has experienced a reduction in sales volume and a deceleration in house prices. This is attributed to changes in economic conditions, the impact of inflation, and tightening monetary policies. The inflationary environment has led to a decrease in disposable household income, resulting in sustained low demand. However, there is optimism for a turnaround in housing market trends by 2024 with anticipated improvements in the macroeconomic environment.
Challenges in the Construction Industry
Hungary is facing a decline in housing construction, with a reduction in housing starts and issued building permits. The number of dwellings under construction has also plummeted, leading to extended construction lead times and slower recovery in the construction industry. Delays in home deliveries are expected.
Transaction Projections
Real estate transactions are estimated to decrease by 20% in the third quarter of 2023 compared to the previous year. However, the anticipated launch of CSOK Plus in 2024 could potentially generate additional housing transactions. It is not expected that prices will undergo significant changes, and there has been a real decline in residential property prices. Rent growth has also remained stable but has not kept pace with inflation. The housing market may see a reversal in the upcoming year with anticipated economic developments and newly introduced subsidies.
Emerging Real Estate Developments
Despite the challenges in the market, there is still a demand for new apartments near the Danube in Budapest. The Waterside Residence project, located on the Marina coast, is a notable development. It offers a unique hybrid system of geothermal pumps and heat pumps for energy-efficient heating and cooling. The project also includes amenities such as a gym, yoga room, sauna, and playground.
Conclusion
The Hungarian real estate market is facing challenges, including economic conditions and a decline in housing construction. However, there are also opportunities for homebuyers and promising developments in the market, such as the Waterside Residence project. With anticipated economic improvements and innovative developments, the landscape could see a positive shift in the coming year.
Questions & Answers
What does the recent analysis by MBH Bank's Analysis Centre reveal about the Hungarian real estate market? The recent analysis highlights a turning point in the housing market in Hungary, with a reduction in sales volume and a deceleration in house prices due to shifts in economic conditions, the impact of inflation, and tightening monetary policies.
What is the current trend in the Hungarian housing construction industry? Hungary is witnessing a decline in housing construction, with a reduction in housing starts and issued building permits. The first three quarters of 2023 saw a 21% reduction in newly built dwellings compared to the previous year, and the number of dwellings under construction also plummeted by 43%.
What are the transaction projections for the Hungarian real estate market in the third quarter of 2023? The third quarter of 2023 estimates over 22,000 real estate transactions, reflecting a 20% annual difference. The anticipated launch of CSOK Plus in 2024 could potentially generate an additional 10-20,000 housing transactions.
Is there expected to be a significant change in residential property prices in Hungary in 2023? No, nominal stability in residential property prices is expected in 2023, but there is a real decline of 18.5% as reported by the MNB. Rent growth remained stable with a 12% year-on-year increase in nominal terms, but it did not keep pace with inflation.
What factors could drive a positive shift in the Hungarian housing market in the upcoming year? Anticipated economic developments such as lower lending rates, improved consumer confidence, rising real wages, and newly introduced subsidies could drive a positive shift in the Hungarian housing market in the upcoming year.
Are there any notable real estate developments in Budapest? Yes, the Waterside Residence, a new development on the Marina coast, is taking shape. There is a high demand for new apartments near the Danube in Budapest, especially those with a Danube panorama.
What energy-efficient features are showcased in the Waterside Residence project? The Waterside Residence project stands out for its AA+ rating in energy efficiency. It is equipped with a unique hybrid system of geothermal pumps and heat pumps for energy-efficient heating and cooling. The project also offers individual services such as a gym, yoga room, sauna, and playground.
What is the outlook for the Hungarian real estate market in the coming year? The Hungarian real estate market is facing challenges, but with anticipated economic improvements and innovative developments, there is potential for a positive shift in the landscape in the coming year.