Winkler said the market would be supported by favourable macroeconomic fundamentals, such as high employment, double-digit wage growth and higher real wages, contributing to an improvement in consumer confidence.

Delayed purchases, following very low transaction numbers in 2023, could also drive up demand, he added.

He noted that home sales had climbed 16pc year-on-year in the third quarter, with the number in the capital jumping 31pc. Home prices are estimated to have risen 13pc nationwide and close to 15pc in Budapest in the third quarter from the same period a year earlier, he added.

Overvaluation on the home market fell to 11.2pc in Q2 2024 from 23pc in the base period, mainly as the result of the decline in home construction and the effect on demand of lower borrowing rates, Winkler said. Between January and August, outlays of home loans rose almost 150pc, while contract numbers climbed close to 50pc, he added.

The average mortgage contract for resale homes reached HUF 18.5m in August, up from HUF 13m in 2023.

Borrowers with children who applied for CSOK Plus home purchase subsidies took out around 7,400 loans.

The NBH projects home completions of around 16,000 in 2024 and a "very moderate increase" in 2025, Winkler said.

Property Developers’ Outlook Improves

Hungary's property development market "bottomed out" in 2024 but is expected to recover in 2025, supported by economic growth and government measures, the head of the Property Developers Roundtable Association (IFK) said in an annual assessment, MTI wrote.

Ernő Takács noted that the fourth quarter could mark the sector’s strongest performance in Central Europe since the start of the war in Ukraine, adding that “we can hop on that train, too.”

Next year, investment in local property developments is expected to double from around EUR 400 million in 2024, according to data from property market consultancy CBRE, he said.

Hungary’s location and existing infrastructure make the country well-suited for industrial developments, though projects have been hindered by a slower-than-expected economic recovery following the recession caused by the energy crisis and high inflation.

This recovery presents “a bigger challenge than earlier expected,” mainly due to weak demand in export markets, particularly from automotive industry companies affected by declining demand for electric vehicles, Takács said.

In the long term, electric vehicles “are the future,” and automotive industry investments, such as the construction of the BYD plant in Szeged, the BMW factory in Debrecen, and the expansion of Mercedes-Benz’s base in Kecskemét, will provide a “huge boost” to industrial property investments in those regions, he added.

Takács also pointed out that government measures to ensure affordable housing could provide a much-needed boost to the residential development market, which began to recover in the second half of 2024.

Source: 
MTI - The Hungarian News Agency, founded in 1881.

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