OTP: House prices may have risen 5% this year, growth could reach 15% by end-2025

András Becsei, Deputy CEO of OTP Bank, responsible for retail business, spoke on Thursday's Portfolio's 'Checklist' podcast about the current situation of the Hungarian real estate market and housing loans in light of the fact that, according to the latest data from the Hungarian Central Statistical Office (KSH), 29% fewer new homes will be built in Hungary in 2024, while the number of building permits issued will decrease by 5%.

András Becsei said on the programme that the property market is subject to multi-year cycles. The current slowdown reflects the processes of 2022-2023, when the rise in energy prices slowed down the market and the launch of new projects.

"What we are seeing is that the current real estate cycle, which started in 2024, is going very well," the bank chief said.

According to the deputy CEO of OTP Bank, the volume of housing loans could reach a record high in 2025 and even triple compared to 2023.

At the same time, house price growth has accelerated, rising by more than 5% so far this year.

We don't have definitive data, but what we see from property valuations [...] is that the price increase could be as high as 5 percent. In big cities, in larger cities, it could be as high as 8 percent. Based on these figures, I would say that by 2025, the price increase in the property market as a whole could reach 15 percent,

he said.

At the same time, the banking expert refuted the view that high interest rates have prevented buyers from returning to the new housing market. He pointed out that current mortgage rates of 6-7% are competitive compared to both government bond yields and the central bank's base rate, as is evident in the case of second-hand homes.

Regarding the low number of new housing starts, Becsei pointed out that government programmes are not a quick fix in the short term, but in the longer term they can contribute to a more balanced supply of new housing.

According to András Becsei, the price of new housing is also a key issue. There is strong demand for apartments under 60 square metres in prime locations at HUF 1.2 million per square metre, but the pool of potential buyers narrows as the price approaches HUF 2 million.

Cover photo: András Becsei in an interview with Portfolio in 2024. Source: Portfolio