Post covid real-estate market of Budapest
The real estate demand in the Hungarian capital has turned upside down due to the epidemic that was primarily evaluated in the crucial decline in rental prices.
Surprisingly, however, the surge of prices has only halted as a result of the plague, without showing any decline in the plurality of Budapest districts. Last year, Budapest’s rental market decreased, which can be understood by the substantial reduction in need due to online schooling, the scarcity of visitors and the introduction of the home office by most corporations. This year, a slow comeback of the market can be experienced; nonetheless, rental rates are still softer than in the pre-covid period.
In Budapest, the normal unit prices per square meter were boosted by 2.85%. In the downtown of the Hungarian capital, inexpensive districts were characterised by an elevated price boost. Therefore, prices in the external parts of the 6th, 7th and the main parts of the 8th and 13th district improved on average by 125% -140%, while in the city centre, the price increase was much lower, only 94%. Nevertheless, the 5th district is still the most costly in the Hungarian capital, where 2,590 EUR had to be spent per square meter in 2020.
The second most costly is the Corvin quarter with prices of almost EUR 2,500/m2, followed by the inner parts of the 6th district where a flat could be purchased for EUR 2,375/m2. The list proceeds with the inner parts of the 8th district, the outer parts of the 7th district, the 14th and 3rd districts of Budapest a flat could be bought for less than 1,945 EUR/m2 in 2020. Compared to last year, the least time required to spend in a given apartment to match the cost of buying and renting has increased in several districts of Budapest based on the data in the first half of 2021. This is primarily due to considerably lower rents, while house prices continued to surge. Accordingly, in the current crisis, it is not worth buying an apartment in the Hungarian capital.
However, it is important to illustrate that this circumstance is momentary. Budapest’s real estate market is now recovering from the economic catastrophe caused by the pandemic, and this is indicated by rising rents. Yet, we still do not know whether a possible fourth wave of coronavirus will bring back the regulations experienced last year that might result in a further plunge.