Changes in the real estate market in 2023
There is no player in the real estate market, whether on the supply or demand side, who would not speculate on what direction the real estate market will take in 2023? How do the end of state subsidies, the inflation situation, the rise in utility prices affect real estate prices? Will the much-anticipated drop in real estate prices come, or is stagnation expected?
Development of the real estate market in 2023
According to real estate market analyses, the effects of the energy crisis have already rippled through the real estate market in recent months, as a result of which the energy classification of real estate has significantly increased in value in the eyes of buyers and tenants.
From the point of view of the demand side, the overhead cost to be paid has become a cardinal issue. This is currently in the first three expectations and criteria on the “list” of buyers and tenants.
Real estate prices, which have been racing for years, may come to a halt this year, and buyers may find themselves in a bargaining position.
In certain regions, for example in priority holiday areas, at Lake Balaton, in some districts of Budapest, and in larger cities, where there is no shortage of job opportunities, the rate of price increase will rather slow down or stagnate – at least according to the experts’ opinion.
What to expect in the real estate market
The possibility of a decrease in real estate prices has been in the air for years, since an amazing real estate price increase has taken place in the last ten years, sooner or later the trend will turn around.
Between 2010 and 2021, Hungary was the second in the EU! the largest real estate price increase (118%), but sublet prices also rose by nearly 50%.
Development of the real estate market – Real estate prices between 2010-2021 in the EU (source: Eurostat 14.01.2022)
Development of the real estate market
After the entry into force of the decree on the change in utility reduction published in the summer of 2022, it became a characteristic of the real estate market that buyers were looking for cheaper, smaller, more sustainable properties and energy modernization became even more important than ever. In autumn, however, compared to the same period of the previous year, there was already a 20-30% drop in demand.
The change in utility regulations also brought about a new trend in the housing market, namely that buyers turned from larger, outdated apartments to economical residential properties.
Development of the housing price index in Hungary
Development of the real estate market – Quarterly development of housing market prices (source: KSH)
In the first half of 2022, the number of loans disbursed for the purchase of second-hand apartments decreased by approximately ¼, which predicted a slowdown in the second-hand housing market. Lending for new apartments rose even more during this period.
Housing prices in the third quarter of 2022 were 19% higher for new ones and 24% higher for used ones compared to the previous year, so the market was still characterized by price increases last year. The real estate market in Budapest continued to “spin” in 2022, the weight of the capital’s housing market increased.
With the exception of the capital, the turnover of the housing market fell in almost all regions, in Budapest there were 15% more transactions between sellers and buyers than in 2021.
Housing market trends 2023
According to real estate market news and professional predictions, there is definitely a chance of real estate market price drops in 2023. There are many people on the supply side, but fewer on the demand side. You could say that sellers are competing for buyers right now.
The home renovation subsidy will end at the end of 2022, this will no longer fuel the “renovation fever” experienced in recent years. Now they prefer newer, more modern properties that do not require renovation or completely new properties.
The future of housing loans is mainly determined by the development of the second-hand housing market, the CSOK, the village CSOK, the babysitting service, as housing purchase subsidies, are still not negligible factors.
The statistics at the end of 2022 already showed that CSOK loans also fell, as did those with market interest rates. The population’s borrowing capacity and creditworthiness have deteriorated, the number of housing transactions has decreased, and this predicts a decline in housing loan.
The Central Bank painted a dark picture of the loan segment last fall, nearing the end of the year. The base interest rate is at a decade high, thus the loan interest rates have risen, which may cause payment difficulties for huge masses in the future.
The development of real estate prices in 2023 will also be shaped by many factors that cannot be influenced, but you must strive to get the best out of the given situation, whether you want to buy, sell, rent or lease real estate.
You can always count on Kenway’s expertise and experience!
Although the circumstances are usually given, with a professional team behind you, your real estate affairs can turn out in the most favorable way!