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Data is based solely on completed market residential real estate transactions. Its source is a database purchased from the National Tax and Customs Board (NAV) by OTP Mortgage Bank, filtered in accordance with legal regulations. In Budapest, the 161 postal code districts and 23 districts, while in the whole country, together with the capital districts, 197 districts and the 19 counties and 18 county capitals formed the territorial basis of the analysis.
The variation in prices can always be presented only in those territorial units where both the base period with a similar data processing at the time of analysis, that is, 2019. I – IX. The amount of traffic data necessary to obtain a reliable result is available between the months and the truncated year of this year, even without replacement of statistical data. However, due to the decrease and rearrangement of traffic at the beginning of the year, this was now possible in fewer cases than last year. Only sales related to total ownership (1/1) of the property were included in the analysis.
How have house prices changed in Hungary?
Traffic data received by NAV and processed by OTP in the first three quarters of this year show a much more moderate average nominal price increase of 4.2% per annum, following a double-digit increase in the last four years. While prices in Budapest and cities with county status have increased further this year compared to the 2019 annual average, a decrease in lower levels of legal status can already be measured. However, this year’s total annual data can still change a lot! Therefore, it is better to compare the first three quarters of this year with the same period last year. Based on this
cities with county status and smaller towns became more expensive by 10% and 7%, respectively, than Budapest, while in the capital the price increase rate was 6%.
At the same time, the analysis-focused annual comparison masks the quarterly price movement: examined in three-month periods, according to MNB data, prices in Budapest clearly decreased, while in other cities prices fell slightly in the second quarter of the year. With the dramatic decrease in traffic in Budapest, this year’s national average price, which therefore includes transaction-level data for all types of settlements, is much lower than last year’s value data. Taking into account the change in transaction rates, the increase in the annual nominal price adjusted by the billing weight of the different legal statutes is 7.3%.
Counties, districts, county seats
Nowhere in the nineteen counties has the price of residential properties sold this year lowered. The leading counties, Heves, Békés and Tolna, are in the lead with a price increase of 20-27%. Somogy, Pest, Komárom-Esztergom and Jász-Nagykun-Szolnok counties also became more than 15% more expensive. Only Baranya and Bács-Kiskun became less expensive than Budapest. At the same time, the Nógrád region, which had been driving for years, has remained in the middle of the field for the second year in a row, which is undoubtedly due to the fact that, despite its proximity to the capital, it is still a cheap area .
Along with the districts of Budapest, 131 out of 197 districts had enough transaction data to make annual comparison possible.
In 17 of the 131 districts, the median price of residential properties sold decreased.
There are two districts in Budapest, I and V, and they are more or less evenly distributed in the country.
Looking at a regional level below, it is worth mentioning the price evolution of our largest cities, the county seats.
In the first three quarters of this year, our cheapest city, Salgótarján, became more expensive at the highest rate, 16%.
(Sensing the general slowdown in price increases: In 2019, Szolnok was still in the lead with a 30% annual increase.) The county seat of Nógrád was already on the podium last year, so the average price here increased by almost 40% in just over a year and a half. Additionally, the price level increased by more than 10% in our other ten county seats. In addition to Salgótarján, Békéscsaba, Szolnok and Szekszárd are also our largest cities, which remain among the cheapest, where there has been a spectacular increase in value for several years. As in the case of districts, the base effect is technically active here, that is, the relative increase in demand for cheaper areas raises prices. Consequently, at the bottom of the ranking, our three most expensive cities are in terms of value growth: Kecskemét with only 1, and Veszprém and Debrecen with 3-4%.
Let’s see Budapest!
Based on the ranking of price changes in capital districts, the clear trend in recent years of cheaper, low-traffic, and no-investment suburban districts at the top of the list, where high prices may have risen due to base low, seems to disintegrate a bit. Although this year is far from the XXII. The district leads the line, which is also suburban XX. district, and the least traveled, traditionally the XXIII cheapest. The district is also at the forefront, including the second 12th most expensive and the 13th busiest. the districts are embedded. The current trend of price evolution is well illustrated by the fact that, although last year the price increase of 14 more districts exceeded 20%, this year the leading corridor XXII. district also falls short of this. The current market trend, which is reinforced by the deep leakage of short-term housing spending (Airbnb) as a result of the coronavirus, is shown in the fact that, after 2019, Districts I and V are back to the end of the list.
One of the top investment locations in District 5, which had previously been at the forefront of price increases for years, the average price dropped a hair and in the prestigious district of Buda by 2% in one year.
This is certainly eloquent, since the last time in 2014 there was a negative sign before any price change indicator in the capital district.
The price change at the postal code level in Budapest is shown in the figure above. Of the 161 zip code districts, 123 were able to do an annual comparison, where at least ten assessable sales were made in the first nine months of both base year 2019 and 2020, so we don’t need statistical overrides in the analysis. In nine districts, prices increased by at least 20% in one year and in another 12 more than 15%. Looking at the entire database after data cleaning, it became almost 38% more expensive in one year, making it the 1204 district of the capital, that is, the XX. central part of the district. Furthermore, the districts of 1125 (District XII, Istenhegy-Kútvölgy-Virányos) and District 1171 (District XVII, Rákoscsaba-Rákoskert) still exceed 30%.
About half of the areas with the highest price increases are in outlying areas and suburban areas.
At the same time, the turnover of the districts listed here is typically low, so the composition effect (for example, the sale of even a dozen new flats) may have played a role in the sharp price increase.
Among the districts with traffic in the 1950s, 1139 (District XIII, the part of Angyalföld closest to the Danube) and 1117 (the central part of District XI and close to the Danube) became the most expensive, at 14%. However, a distorting factor in both is the sale of newer homes that are more expensive than average for several major investments. In 19 zip code districts, the average price has decreased in the part of 2020 so far. The rate of this exceeds 10% in zip code districts 1051 (District V, southern part of Lipótváros) and 1088 (District VIII, Palotanegyed).
You can read about specific home prices in this previous article:
Cover Image Source: Getty Images
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