New home prices in Budapest skyrocketed - Here are the most and least expensive districts
The questions that will be answered in this article:
- How did the price of new dwellings change in Budapest over the past eight years?
- What is the average price per square metre of homes in the 23 districts of Budapest?
- How much new homes actually cost in Budapest districts?
- Which districts in the capital are the buyers' favourites?
- Which districts in the capital are the developers' favourites?
The current survey includes 19,818 dwellings, which is the total number of dwellings in projects where at least one dwelling was offered for sale in the last six months. The actual supply is of course smaller, with around 6,200 apartments currently available for buyers looking for a new-build flat in Budapest.
This figure is 5% lower than in the previous quarter, as continued high demand was accompanied by weak new supply. Only 15 new projects started sales in the latest quarter (June-August), 10 of which include fewer than 10 dwellings. At the same time, the unusually low new supply and high sales meant that the number of projects listed and the number of homes surveyed fell by 8% and 4% respectively compared to the previous quarter.
How many residential properties changed hands?
The survey shows that the number of homes sold fell compared to the previous quarter, but was still high compared to the last two years.
In the third quarter (the summer months to be exact), 1,448 new dwellings were purchased in Budapest, 16% fewer than in the second quarter (spring).
The reason for the decline is the extremely low new supply and the seasonality of the market of new-build homes. Four of the five developments with the highest number of apartments for sale only started sales in the second quarter, but nearly 60% of the apartments sold were smaller than 50 square meters, which shows the strong investor activity in the market, as they are typically looking for rentals in these well-rentable sizes.
The 1,448 homes sold in a quarter suggests that, with unchanged demand, the market could absorb the current supply in just over a year.
How did prices change?
The increase in supply prices has moderated compared to the previous quarter (1.2%), with the average price of newly built apartments in Budapest currently at HUF 1.53 million/m2. On an annual basis, prices per square metre rose 5% again.
Prices rose the most in the inner city (Pest downtown area), where most of the supply is located, while the outer districts of Pest saw a decrease of almost 2%. The asking price of apartments for sale has gone up by more than HUF 2 million, so
the average new-build apartment in Budapest now costs more than HUF 114 million.
The most expensive and the cheapest districts
Compared to the previous quarter, District 2 has also taken the lead from District 1 in terms of price per square metre. It is the only district where the average price per square metre of newly built apartments exceeded HUF 3 million.
This is also due to the fact that developments in the district are also taking place on better located, more expensive plots, targeting more capital-intensive buyers. In addition to the higher prices per square metre, the floor area of the apartments being built there is well above average, so that the actual average price in the district has reached HUF 452 million.
In terms of unit prices, districts 1, 12 and 5 come next, all in the HUF 2.5 mn to HUF 3 million price range. Traditionally, this is followed by District 6 and District 7, both in the inner city, although the latter is well behind. Districts 11, 9 and 3 are also slightly above the Budapest average, with typical prices per square metre between HUF 1.6 mn and HUF 1.7 million.
What is new compared to previous quarters is that this time there is only one district where the average price of new housing is below HUF 1 million per square metre.
The average price of new apartments offered in the 20th district is HUF 985,000 HUF per square metre.
As we have already seen in the case of District 2, the larger floor areas combined with higher prices per square metre result in extremely high average prices in the district. This is also the case in District 12, where the average price of new housing has reached HUF 323 million, but prospective buyers should also expect to pay HUF 273 million in District 5 and HUF 228 million in District 1.
The average price level of HUF 114 million in Budapest is even higher in districts 6, 11, 3, 9 and 15, while less than half of the districts have an average price level of less than HUF 100 million. The cheapest is the 19th district, where the average is HUF 64 million for which buyers can typically get 51 square metres.
Price changes by developers
Compared to the previous quarter, developers re-priced 37% of homes, a slightly higher proportion than in the spring months. The number of price hikes rose by 20% and reductions by 10%, with the majority of corrections still being increases. The most common price changes this time were between 2.5-5 million forints, but the number of apartments corrected by HUF 5-10 million was also up significantly.
Most of the reductions this time were under HUF 2.5 million, but the number of price reductions between HUF 5-10 million has also increased. It is therefore clear that developers are increasingly bold in raising prices in response to this year's higher demand.
According to Eltinga analysts, the slight drop in demand was most noticeable in the inner-Pest districts and Angyalföld. Developers sold a quarter fewer apartments in projects being built here than in the previous quarter. In Outer Pest and other districts of Buda, the decline was smaller than average, while in Újbuda, 5% more apartments found buyers in the summer than in the spring.
the 11th district accounted for almost a fifth of all new housing sales in the capital, which has only happened a few times before.
This ratio shows that nearly 300 new homes have been sold in Újbuda, but the first place is still occupied by the 13th district, with 500 homes sold.
There were also some districts where no contracts were signed at all, or only for a few flats. This is the case in districts 5, 6 and several outer-Pest districts, but even in District 2, the most expensive district, by far, very few apartments were sold.
Supply is also in line with demand, with almost a third of the more than 6,200 vacant apartments also located in the 13th district, while the supply share of the 11th district is below the demand of the last quarter.
However, there are also districts where the lack of available plots does not allow for the launch of large-scale projects, and the number of new homes coming onto the market is often low in districts 1 and 5.
And there are plots available in the outer Pest districts, but developers are not queuing up for them, either because of the rules on the buildable area or because of the lower profits available due to lower prices. The latter include the 16th, 18th and 21st districts, which account for less than half a percent of the total supply.
Demand for two-room apartments is the highest
Demand for two-room apartments remains the highest.
48% of the homes sold in the first three quarters were flats with a living room and one bedroom.
Three-room apartments accounted for 28% of all homes sold, while studios and apartments with at least four rooms accounted for 12 and 13%, respectively. The supply of two-bedroom apartments is decreasing due to persistently high demand, and they now account for only 38% of the total stock available for purchase.
Outlook
According to the survey, about 2,300 homes are expected to be delivered this year in projects under sale, with 40% of homes still available for purchase. With deliveries in 2025 and 2026, developers are advertising an additional 4,000+4,000 homes, with half of homes these projects sold so far.
Compared to the average of previous years, there are far fewer homes, only 360, on offer where construction has not yet started.
But more than the average, 1080 properties are in developments that have already been completed.
The quarterly Budapest Housing Market Report is produced by ELTINGA Real Estate Market Research Centre and ECRS, which have been conducting a survey of the new housing market in Budapest since the second half of 2015 and in the countryside since 2019.
Cover photo (for illustration purposes only): Getty Images
