Hungary's biggest property price increases

High price increase in Szeged

While many had hoped that house prices would stabilise or possibly fall in 2024, for many this has not come true. Price increases were highest in municipalities, while Szeged was the most expensive city.

Housing prices rose most in Szeged

Those who invested in real estate in 2024 mostly made significant gains, as property prices in big cities rose by 8-25 percent, according to Ingatlan.com, while annual inflation was 3.7 percent. The biggest price rise, above 25%, was in Szeged, which may have been helped by the arrival of Chinese car manufacturer BYD. Pécs (19.25%), Debrecen (18%), Miskolc (12%) and Győr (8%) also recorded above-inflation increases. Despite a 12% rise in prices, Budapest has the highest prices per square metre in the country.

The Hungarian property market is not just about big cities, it is also worth looking at changes in different types of settlements, for which the MNB's latest Q3 housing price index provides some clues.

Municipalities have seen the biggest price increases

Municipalities rose by 19.7% year-on-year, while cities saw a 12.3% increase. By region, towns in North Great Plain (15.6%) led the way, followed by towns in South Transdanubia (15.1%), West Transdanubia (13.4%), Pest County (12.6%), South Great Plain (11.2%) and North Hungary (7%).

According to MNB data, while South Transdanubia and North Great Plain recorded a quarterly price increase of 6.9% and 4.6% respectively, South Great Plain cities saw a 2.5% decrease. This is strange in light of the fact that price increases in the first two quarters were 7.8% and 5.7% respectively, so a correction is likely.

Buyers on credit fared well

Home buyers with mortgages also fared well from the price rises. Take for example a home buyer in Szeged who bought a HUF 50 million property with a HUF 20 million loan in early 2024. If the property had increased in price in line with the average in Szeged, it would have increased in value by HUF 12.6 million. The loan repayments totalled HUF 1.8-1.9 million, so the price increase covered about 7 years of loan costs. The increase in value of a loan of HUF 20 million also amounted to HUF 5 million, compared to a loan cost of HUF 1.8-1.9 million.

In 2024, the city with the lowest appreciation, the HUF 3.9 million increase in value represented a HUF 1.6 million increase in value. If the property is an investment property, owners can also calculate on the income from the expenditure.

Although future house price trends are difficult to predict, a significant fall in prices is unlikely.

Source: bankmonitor.hu