Hungarian real estate market prognosis: brutal price falls and partial collapse
The Hungarian real estate market is currently experiencing the “years of waiting”. At the moment, the market is mostly waiting, vegetating, surviving. Obviously, this is like a death sentence for the property market participants; however, there is still hope that the market will experience soaring like that of the past 6-7 years.
Since the Covid pandemic in 2020, it has been a constant struggle, uncertainty, reorganisation and challenge for every segment of the domestic real estate market, Portfolio writes. The housing market crashed, then boomed and now it has crashed again.
Declining number of transactions in the real estate market
The property market is currently living the “years of waiting”. The incoming data keeps suggesting difficulties the market is experiencing. The basic functioning of the market is derived from the continuous and stable operation of the business. Transactions are what enable this operation. Unfortunately, that is what is in short supply at the moment.
Although the market is not even close to what it was experiencing during the 2008 financial crisis, the soaring of the past 6-7 years and the business models built on them have started to crack here and there. These are years of wait-and-see caution, which is the silent killer for market participants, Portfolio writes.
People prefer cheaper, less energy-efficient properties, contrary to expectations
Otthon Centrum has carried out an analysis of the energy efficiency of real estate. It shows that energy efficiency increases the price of the property. This is one of the reasons why the forecasts for an increase in demand for energy-efficient buildings have not materialised. The majority of Hungarians are buying cheaper, less efficient properties.
As the effects of climate change become more and more tangible, environmental awareness is gaining more and more attention in all walks of life. In Hungary, energy performance certificates have been mandatory since 2012 for the construction of new buildings, for the sale of existing buildings and for the rental of property, Index notes.
Based on the data for the first half of the year, it appears that expectations of a shift towards more efficient properties have not materialised, with cheaper but less efficient properties selling this year.
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