The recovery in the housing market that started in 2014 stalled in 2019, before the spring and autumn waves of the coronavirus epidemic caused a temporary downturn in 2020. The price indices for new and second-hand dwellings diverged, and while the former continued to rise at the same pace as before, the latter slowed down. The jump in price increase in Q1 2021 was followed by little further movement in Q2 2021, with a pick-up in sales.

According to final data, 134,000 homes were sold in 2020, 15% fewer than a year earlier.

The total value of transactions on the housing market also fell, down by 11% year-on-year to HUF 2,690 billion.

In 2020, fewer foreign buyers entered the Hungarian housing market than before. The number of Chinese and Vietnamese buyers in particular has fallen, but demand from all European countries has decreased, with the exception of Slovakian buyers.

Following last year's epidemic period, the housing market recovered in Q1 and Q2 2021, despite the new wave of the epidemic

The decline in housing sales that started in 2019 was exacerbated in 2020 by successive pandemic periods. Annual sales were 15% down on the previous year and showed significant fluctuations throughout, linked to the evolution of the epidemic situation.

In 2021, the housing market rebounded. Despite the new wave of the epidemic, sales in Q1 rose by 17% compared to Q1 2020, based on data at the same processing rate. Q2 figures are even higher compared to the previous period, reaching 135%. The previous period fell during the first closures and therefore represents a low base.

The share of new dwellings in total sales has gradually increased since 2016, reaching 7.1% in 2019. In 2020, this share decreased slightly, with 6.7% of contracts being for new-build housing. According to the data received so far, 3.7% of all dwellings sold in Q1–Q2 2021 were new build.

Annual housing price indices rose briskly until 2019, then slowed in 2020

The rise in the annual pure price index for second-hand housing slowed in 2020. The index, calculated on a 2015 base, rose by 4.2% year-on-year due to housing market volatility in 2020. The price level of new housing transactions in 2020 was 13% higher than in 2019.  

The annual real price index for new dwellings, taking into account the consumer price index, rose significantly (9.2%), while that of second-hand dwellings barely increased (0.7%), temporarily halting the rapid rise in real home prices in the second-hand housing market since 2014.

Total housing market turnover fell in 2020

Based on final data, the total value of the housing market turnover in 2020 was HUF 2,690 billion, down 11% from the previous year. Budapest was most affected by the decline, where the total value of dwellings sold was 14% lower than in 2019. The decline was the most moderate in villages (4.2%), while in county seats and smaller towns it was around 10%. Although sales of new dwellings fell slightly in 2020, their faster price growth continued to increase the weight of the new housing market in total sales, which, with total sales of HUF 336 billion, accounted for more than 12% of the total housing market.

The shift in the aggregate turnover of the second-hand housing market can be observed not only across settlements but also across building types. Sales of prefabricated flats in housing estates decreased only in the capital (7.2%), while in the county capitals and other cities their total sales even increased slightly compared to 2019 (4.0% and 1.5% respectively). Single-family and condominium markets suffered the largest declines in the capital in 2020 (20% and 22%, respectively).

Fewer foreign buyers

Due to the epidemic situation, just over 5,000 foreign nationals bought property in Hungary in 2020, compared to 8,000 a year earlier. With the exception of Slovakia, there were fewer buyers from all other territories. The number of buyers from Germany and Romania decreased only slightly, while purchases by Chinese, Vietnamese and Israeli nationals were less than half of what they were in 2019. However, there was little change in the nature of purchases. Western European buyers were more likely to be retired and made a larger proportion of their purchases outside Budapest, while Chinese, Vietnamese and Israeli buyers continued to be primarily interested in the capital. Accordingly, the latter bought the most expensive: Chinese and Vietnamese buyers spent on average more than HUF 50 million, while Israelis spent close to HUF 40 million.

Surge in prices in the first quarter of 2021 slowed in the second quarter

During 2020, both epidemic waves involving restrictions temporarily pushed back home price increases in the second-hand housing market, with prices in Q4 only 2.8% above the same period of the previous year.

A strong correction unfolded in Q1 2021, reinforced by the direct or indirect effects of new housing subsidies. The increasing number of sales was accompanied by a sharp rise in prices of second-hand housing of 8.6% compared to the previous quarter. The index value compared to the 2015 base year then reached 192%. In the second quarter, price growth essentially stopped (0.6%).

In the new housing market, prices rose throughout 2020, and by the end of the year were 14% higher than in Q4 2019.In Q1 2021, new housing prices were more than double the 2015 base, while also showing a significant increase of 5.9% on the previous period. In Q2 2021, this market also slowed down, with the price level of known sales not moving significantly (0.5%).

In Q1–2 2021, in the new housing market

• the number of known transactions so far is less than 2,000.
• The average price of a new dwelling was HUF 40.0 million, HUF 1.3 million more than the average price of the previous year.
• In Budapest, the average price of a new home is HUF 48.4 million, nearly HUF 5 million more than in 2020. At the same time, the price per square metre rose by only 4% to HUF 827,000, indicating a shift towards larger apartments. Among the districts with an extensive new housing market, the prices were 815 thousand forints in District XIII, 766 thousand in District IV and 931 thousand in District VIII. So far, few data are available on new home sales in the inner districts of Pest and in district XI, where prices ranged between HUF 900 thousand and HUF 1 million in the first six months of the year.
• One third of new homes were sold in the county seats, at an average price of HUF 524 thousand per square metre, 15% more expensive than in 2020. The price per square metre was 564 thousand forints in Győr, which has the largest market for new apartments, 602 thousand in Debrecen and 418 thousand in Nyíregyháza. Compared to the 2020 level, apartments have become more expensive everywhere except Tatabánya, but there are several county seats where the number of new home sales has been negligible so far.
• The price level in the settlements around Lake Balaton reached HUF 771 thousand per square metre, which is 7.8% higher than in 2020. In Siófok, the average price per square metre of newly built apartments was HUF 833,000, 12% more than in 2020.

The prices of new dwellings delivered in 2020 were mostly set in contracts signed several months, or even years, before, so the price level of new dwellings presented here is below the supply prices of the period and only provides information on the price evolution of dwellings actually delivered.

Changes in the area and price ratios of the second-hand housing market

Between 2015 and 2019, year-on-year sales of second-hand homes rose rapidly in smaller towns and villages, increased slightly in the county seats and fell significantly in Budapest. Accordingly, the share of the capital has fallen from 30% to 19% over these years. (Fewer sales of second-hand dwellings were only partly offset by more new dwelling sales in the large cities.)

In 2020, the number of second-hand home sales decreased in all categories of settlements, but Budapest's share still continued to fall. One fifth fewer second-hand homes changed hands in the capital than a year earlier. Sales fell by 12% and 16% respectively in the county seats and towns and by less than 10% in the villages.

The data for Q1–2 2021 so far are 29% above the low base of the previous year, but 5.2% below the similar processing rate in 2019. Turnover of housing estate panel flats were barely affected by the slowdown in 2020. Their sales barely fell in Budapest and even rose slightly in the county seats. In general, sales of urban single-family houses suffered the biggest decline, while sales of non-housing estate condominiums in the capital also fell sharply by 23%.

In Q1–2 2021, in the second-hand housing market

• the average price of a second-hand dwelling was HUF 19.2 million. This is the same as the average of the previous year, but represents an increase of HUF 800 thousand compared to the low of Q4 2020. In Q1–Q2 2021, the average price per square metre was 306 thousand forints, 8.5% higher than the average of the previous year.

• In Budapest, the average price of a dwelling was HUF 36.2 million, the same as in 2020. The specific price, however, rose by 3.6% to HUF 663,000. On the Buda side, average home prices fell while specific prices rose slightly, indicating a shift in the mix of sales towards smaller apartments. In the inner districts of Pest, the average price decreased and the price per square metre stagnated, while in the transitional and outer districts of the Pest side, all indicators show an increase.

• In the Budapest agglomeration, the average house price increased to HUF 50 million, which is about HUF 13 million higher than in 2020. The specific price has risen from HUF 418,000 to HUF 504,000. The price of housing in the north-western part of the agglomeration has risen sharply, with the price of a dwelling reaching nearly HUF 67 million, taking the lead from the western sector, which has been the most expensive in the agglomeration.

• The average price of an apartment in the county seats was HUF 22.0 million and the price per square metre was HUF 353,000, both up on the previous year. The most expensive county seat was Székesfehérvár (29.2 million HUF), followed by Debrecen and Győr with 27.6 and 26.6 million HUF respectively.

• In the Balaton agglomeration, the price of second-hand housing has risen from HUF 34.2 million in 2020 to HUF 38.2 million.

• The average price of HUF 16.8 million in smaller towns did not reach the 2020 level, while specific prices remained essentially unchanged (HUF 219 thousand).

• The average price of housing in villages outside agglomerations was HUF 7.3 million, 4.4% more than in 2020.

Home prices continued to rise in the majority of EU Member States in Q2

Eurostat's Housing Price Index shows a combined price trend for second-hand and new dwellings. In the second quarter of 2021, the aggregate EU27 home price index was 134.5% of the 2015 average, while the euro area home price index was 132.4%.

In the second quarter of 2021, the value of the aggregate housing price index in Hungary, calculated according to Eurostat's methodology, reached 194.7%, still the highest among the countries reporting data. During this period, all European countries surveyed recorded price increases. Latvia and Iceland recorded the highest increases in house prices (6.7% and 5.3% respectively) compared with a year earlier. Prices were also higher in all except Cyprus compared to the same period in 2019. Czechia and Denmark have seen sharp annual price increases of more than 15%.

Among the neighbouring countries, Slovenia and Austria recorded quarterly price increases of more than 4% and significant year-on-year increases of 10% and 12% respectively. In Slovakia, prices rose by 3.3% in Q2 2021 compared to the previous quarter, after a decline in Q1. In Romania, the fall in the middle of 2020 was followed by an increase, with prices in Q2 2021 just 3% above their level a year earlier.  

Further data, information

Methodology
Annual national data:
18.1.1.1. Summary data of housing
18.1.1.13. Housing price indices
18.1.1.14. Mean price per dwelling and sqm by region and building type
18.1.1.15. Number of housing transactions made by private persons
Annual regional data:
18.1.2.8. Mean price per dwelling by region and settlement type
18.1.2.9. Mean price per sqm by region and settlement type
18.1.2.10. Number of housing transactions made by private persons by region and settlement type
18.1.2.11. Mean price per dwelling by region and building type
18.1.2.12. Mean price per sqm by region and building type
Infra-annual national data:
18.2.1.1. Summary data of housing (quarterly data)
18.2.1.8. Housing price indices by quarter years
18.2.1.9. Number of housing transactions made by private persons by quarter years
Infra-annual regional data:
18.2.2.13. Mean price per dwelling by region and settlement type (quarterly data)
18.2.2.14. Mean price per sqm by region and settlement type (quarterly data)
18.2.2.15. Number of housing transactions made by private persons by region and settlement type (quarterly data)
18.2.2.16. Mean price per dwelling by region and building type (quarterly data)
18.2.2.17. Mean price per sqm by region and building type (quarterly data)

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