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Despite the sudden uncertainty that occurred in the spring, the forecast of the experts we interviewed at the time for Budapest house prices was surprisingly accurate. In late March, experts said that, on average, housing prices in the capital could fall by around 7 percent in September. Although we can still see only the second quarter exactly, based on this, both the MNB and the CSO reported a very similar price decrease. The question is whether the downward trend will continue in 2021.
What will happen to house prices in 2021?
In this survey, this time we focus exclusively on Budapest and wonder what price changes might occur in the capital’s real estate market for panel houses, brick and single-family houses by the end of the first quarter of 2021 and the end of 2021, and how. rents and transaction numbers could change.
- Within Budapest, the single-family home category is where most no longer expect any further price reductions. Here, a stagnation until April 2021 and a small percentage price increase by the end of next year is also conceivable.
- In the case of panels, however, there may be another 3-4 percent drop in prices through spring, which could be hit by a stagnation that will last at least until the end of next year.
- In the case of brick floors, experts expect a minimal devaluation of 1-2 percent until spring, but even after that they forecast stagnation rather than price increases.
- There may still be a further drop in rents of around 2-3 percent through spring, but as the epidemic improves, the market could adjust upward from 4 to 5 percent by the end of 2021, which which means that the situation could be very similar to current levels within a year.
Overall, 2021 is not expected to be a skyrocketing rise in house prices, but we don’t expect any more significant drops. Compared to the price increase of the last 7 years, this may even be good for the market, making expectations more predictable for a while. However, it is important to note that the uncertainty about the epidemic is still very present. Regarding demand, it is expected that 133 thousand sales will be made nationally in 2021, which is also very similar to this year, but is still behind the values of 150 thousand in 2019 or around 160 thousand in 2018 .
| How will house prices change in Budapest compared to today? (%) | ||||||
| Until April 2021 | Until December 2021 | |||||
| Bp. Brick | Bp. panel | Bp. Family home | Bp. Brick | Bp. panel | Bp. Family home | |
| Akos Balla | – 10 | – 10 | – 5 | – 10 | – 10 | – 5 |
| László Balogh | – 3 | – 5 | +1 | – 5 | – 7 | + 2 |
| Karoly Benedikt | 0-5 | 0-5 | 0-5 | 0-10 | 0-10 | 0-10 |
| Incze Zsombor | + 2-4 | + 1-3 | + 1-3 | + 5-10 | + 2-7 | + 5-10 |
| Kiss Ákos | – 1-2 | – 2-3 | 0 | – 10 | – 10-15 | – 2-3 |
| Tamás Kricsfalussy | + 1-3 | n / A | n / A | + 3-5 | n / A | n / A |
| Zoltán Sápi | 0 | 0 | + 1-2 | 0 | 0 | + 3-4 |
| David Valkó | – 5 | – 5 | – 2 | – 5 | – 5 | – 2 |
| briefcase | – 3 | – 8 | 0 | 0 | – 5 | + 5 |
House construction
In the area of home construction, 2020 was about big government announcements. At first, it was planned to introduce a reduced VAT of 5 percent only in rusted areas, and then in the fall, it was announced that a discounted VAT would be returned to almost all new houses under certain size limits, and a 0 percent VAT rule in rusty areas. In addition, the range of family benefits has been expanded in several elements, most of which cover home renovation. The details of this are described in detail in the following articles:
As for the price of new homes, experts clearly expect a stagnation in the spring and, by the end of 2021, a slight increase of around 2 percent. We estimate that the number of new floors delivered this year could have been between 16 and 18 thousand. Despite the government measures, the experts interviewed do not expect more than this next year, the average number of respondents is 17,000, but by 2022 they expect only 18,000 home transfers.
What types of properties will be in greater demand after the epidemic?
- “With the outbreak (perhaps starting in the spring), more emphasis will be placed on downtown urban residential properties.”
- “After the epidemic, demand will increase across the country, especially for new homes and properties that can be renovated with a few million forints.”
- “The new support system may increase interest in homes and single-family homes that will be renovated.”
- “The demand for good housing is still strong, but after the epidemic, it may also increase due to poorer quality.”
- “Demand for newly built condos may continue to increase in large industrial cities, new homes may be more in demand in the capital, and single-family homes may be more in demand in the agglomeration and around Lake Balaton.”
- “The Lake Balaton region may be the winner next term, and I also expect lively traffic in county capitals, county-status cities and their agglomerations.”
- “In the vicinity of large cities, due to the large number of jobs, preference is given to areas with less integration and quality housing.”
- “This year there was increased interest in apartments with more living space and good location, the crowded areas became more valuable and this is expected to continue in 2021, but depending on the economic situation, the apartments in the center of Budapest and the University towns may regain strength. Housing subsidies can boost demand for new-build homes. “
What will happen after the epidemic?
Most believe that after the epidemic, investors will reappear in greater numbers in the market, but there may also be a slight increase in the number of foreign buyers and buyers with credit. However, experts are divided on whether this will lead to an immediate increase in prices. Almost everyone agrees that if tourism recovers, rents in the city center will increase immediately, but that is not certain to happen in 2021. The positive impact of family support measures is overshadowed by the lack of construction capacity, higher technical requirements and the weakness of the forint, so we expect the Portfolio to be a year of stagnation in 2021 in terms of prices, housing construction and rents. will be.
The following experts participated in the survey: Balla Ákos – Balla Ingatlan, Balogh László – Ingatlan.com, Benedikt Károly – Duna House, Incze Zsombor – Takarék Group, Kiss Ákos – Property Market, Kricsfalussy Tamás – Metrodom, Sápi Zoltán – Budapest Housing Market Report, Valkó Dávid – OTP Mortgage Bank and the Portfolio Real Estate team
Cover Image Source: Getty Images
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