Page 34 - bne_Magazine_May_2018_print

34 I Special report bne May 2018
Property prices in Hungary are rising faster than incomes
Residential real estate in Hungary set to grow
while prices of new-builds fell by 4%. However, prices in 2017 have already exceeded pre-crisis levels by 4% among existing properties and by 30% among new-builds, according to the Hungar- ian Central Statistical Office (Központi Statisztikai Hivatal).
Property prices vary across Hungary. The country is divided into 19 counties forming seven regions, with Central Hungary being the most expensive, with an average price of €1,140/m2. Local property prices grew the most during the first three quarters of 2017 – by 15% from 2016. In the rest of the regions, residential property is twice or thrice cheaper, despite prices increasing by 8–10%.
Property prices in the administrative centres of Hungary are growing twice faster than in small localities. The price per square metre is growing 25% faster in new builds than in the existing prop- erty market, according to the Hungarian Central Statistical Office.
The crisis affected the construction sector more severely. In 2008, about 17,400 residential facilities were built, compared to 3,100 in 2015. Construction volumes began recovering as late as in 2016. According to the latest data, dur- ing the first three quarters of 2017, 4,100 newly built residential facilities were listed for sale.
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Investors believe that Hungary’s property market is a good investment and expect local residential property prices to continue rising for at least a decade. According to Hungarian media outlet Origo, every fifth property trans- action in the country involves foreign buyers, who are mainly from China, Russia and Ukraine.
Hungary is a popular location among small companies and international corporations who want a base in Central Europe. The country has a strong labour base, and salaries are low compared to most European Union (EU) countries, reports the Tranio real estate consultant that specialises on Central and Eastern Europe (CEE).
The average annual wage in Hungary
is just €6,700, or about four times less than France or Germany, according to Statista. But property in Hungary is cheap. As of February 2018, prices aver- age €2,500/m2 compared to €4,300/m2 in Germany, €11,600/m2 in Austria and €12,800/m2 in France.
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Growing prices, especially
in central districts
The 2008 global economic crisis had a negative effect on Hungarian property prices. Between 2007 and 2013, when prices bottomed out, prices of exist- ing residential property fell by 22%,
Existing residential property prices across Hungary in Q1-Q3 2017
Source: Hungarian Central Statistical Office