Buyers of their first flats in Hungary did badly
In recent years, the market for residential real estate in Budapest has been determined by the rapidly rising prices per square meter. Within the period 2013-2021 examined by KPMG, house prices in Budapest and Prague increased the most in the region, with the price per square meter doubling in both capitals during this period.
Although by the end of 2019, the surge in prices also eased, partly due to the epidemic and partly due to VAT temporarily restored to new homes (from 5 per cent to 27 per cent), market participants can expect another strengthening in 2021 as a whole due to returning tax cuts and post-recession economic recovery.
Nevertheless, for the current average square meter of flats in Budapest, he always leads only the lower house of the field, very lagging behind the vanguard led by the Vienna – Berlin – Prague trio.
All of this is good news for property owners in the capital, but not good for those looking to buy the first home of their lives, so researchers are also looking at how house prices have changed relative to net income. This is answered by the housing price index and the quotient of net income, which shows how many questions house prices have risen relative to net per capita income.
Scissors between salaries and house prices have widened
In the case of Hungary, this is 1.7, which means, through a simplified example, how many of our salaries we examined increased 32, while prices per square meter rose for 124 years, that is, scissors between income conditions and varnish.
The only 1.7-fold increase in Hungary was recorded in Germany alone (1.78-fold), while the average for the other countries was only 1.43-fold. The quotient increased exponentially between 2015 and 2019, coinciding eerily with the first domestic era of discounted housing, after which the scissor opening slowed.
Only in Prague is the situation more difficult
If we ask the question of what percentage of our annual salary we can buy a square meter of new housing, the situation in Hungary turns out to be more favorable, as the 35 percent in Budapest and Vienna only precede Prague, where the annual income is 58 percent if paid. for a square meter of new housing.
Hungarians, however, are disturbed by this factual smaller country than many others, because in Hungary 92% of the population lives in owner-occupied housing, and in most cases behind the purchase of housing there is also the sale of more expensive second-hand housing. The real estate market in the capital is certainly overvalued, says KPMG.