László Balogh, a top economic analyst at ingatlan.com, claims that home prices have remained stagnant since the fall of 2022. In other instances, he said, costs have even decreased since January of this year. László Balogh discussed the current trend change in the Hungarian real estate market with Index.
Reversal of the property market’s trend
According to László Balogh, chief economist at ingatlan.com, the real estate market has undergone a significant adjustment this year compared to what we have become accustomed to over the previous seven years. He thinks that things have changed dramatically.
He said that between 2015 and 2022, supply was absorbed by brisk demand. Because of this, there were fewer houses available to purchasers at higher prices. According to Mr. Balogh, since the pattern changed, supply has started to rise sharply while demand has decreased by half annually. The psychological threshold of 200,000 for the amount of real estate listings for sale and rent has already been crossed, he claimed. Compared to March of last year, it represents an increase of 30%.
What’s the cause?
The growth of homes for sale, in the expert’s opinion, is the primary cause of the increase. In this circumstance, purchasers’ negotiating power has expanded 1.5 times more than it did a year earlier. Prospects favor purchasers who have been in the market for a while or are just now joining it.
The expert added that housing costs have risen during the previous seven years. According to Index, this has not been a problem for purchasers since, as state subsidies have grown, interest rates on house loans have decreased. As a result, many people have taken out extra loans.
As a result, Mr. Balogh continued, “every second property purchase is now funded by some sort of debt.” According to the expert, “Since January, we have already noticed a decline in pricing in certain regions, which is attributable to a fall in demand.”
He continued by saying that the nationwide decrease in demand and rise in supply happened very swiftly. Both in Budapest and the county seats, demand has decreased by 50%. At this time, no area of the housing market is unaffected by the trend change.