The National Bank of Hungary (MNB) has published its latest house price index for the third quarter of 2018. According to the aggregated MNB House Price Index, residential property prices rose by an average of 3.3% in nominal terms in Q3, with annual growth in house prices being 15.7% in nominal terms, down from 16.7% in the previous quarter. The quarterly growth rate diminished both in Budapest and in other cities, and prices even dropped in smaller settlements compared to Q2.
According to the aggregated MNB House Price Index, residential property prices rose by an average of 3.3% in nominal terms in Q3 2018, with annual growth in house prices being 15.7% in nominal terms, down from 16.7% in Q2. In municipalities, average nominal growth in house prices was only 5% in annual terms in Q3. This was more than 10 percentage points slower than the national average. As a result, the gap between price levels in small and large settlements continued to widen.
In real terms, the national average annual growth rate of house prices was 11.7% in the period under review.
Quarterly growth
In Q3, the nominal average quarterly growth rate of house prices slowed down in both Budapest and cities outside Hungary’s capital relative to the previous quarter. By contrast, prices fell slightly in municipalities. In Budapest, house prices rose by 5 per cent on average in nominal terms in Q3. This represented a 1.5 percentage point decline relative to the previous quarter. Nevertheless, the annual growth rate of house prices picked up further, as seen in the previous quarter, with the 23.5% increase in Budapest exceeding the national average increase in prices by 7.8 percentage points. In cities outside Budapest, house prices were up 4.5% in Q3 relative to the previous quarter. As a result, the annual nominal increase in prices rose above 17%. In municipalities, house prices fell by 50 basis points in nominal terms. This brought the annual growth rate down to only 5% in small settlements throughout Hungary, reflecting a significant slowdown from the 11.9% annual increase recorded in the previous quarter.
