House price growth expected to be more dramatic this year than previously estimated

House price growth expected to be more dramatic this year than previously estimated

Change in Housing Market Trends to 2025

More people are planning to buy a home this year due to the current low interest rate environment, increased household savings and housing subsidies, according to a recent analysis by MBH Bank. However, the MBH Index says supply will not be able to keep up with rising demand, which could lead to a price increase of up to 14-17 percent in the housing market.

Rising demand expected in 2025

Experts predict that housing demand could continue to grow in 2025 thanks to available subsidies, new home purchase incentive schemes and household savings. A lower interest rate environment in the start-up year, averaging above 7 percent, will support housing loan growth. Changes earlier this year, such as the easing of credit for green home buyers, are also contributing to the market recovery.

Factors highlighted by MBH experts

  • Preservation of available home purchase subsidies
  • Employment loan options since 1 January
  • Start of the rural home renovation programme
  • Use of SZÉP card for home renovation
  • Launch of a preferential housing loan for young people

In addition, rising real wages and income from interest payments on government bonds, as well as tax-free pension savings, could boost housing market demand.

Differences in housing activity

Housing construction activity in Hungary is not uniform. The number of building permits has declined nationally, with Budapest, for example, experiencing a 34 percent drop. In contrast, the number of permits increased by more than 50 percent in the South Transdanubian and North Great Plain regions.

Market price increases

Analysts at MBH Bank predict that real estate market prices could increase significantly in 2025 compared to the previous year. While prices rose by 12 percent in 2024, next year prices could rise by 14-17 percent. This change will be felt in the capital as well as in rural areas, with significant price rises expected especially in areas with new jobs.

The experts' forecast of a 14-17 percent price increase in 2025 is higher than previous estimates, which draws even more attention to the evolution of the market and the likely impact of rising demand.

Source: telex.hu