The number of years you must work in Hungary in order to afford a flat in Hungary
The number of years you must work in Hungary in order to afford a flat in Hungary
This autumn, the Hungarian National Bank (MNB) published its Housing Market Report. The MNB releases this report twice a year including data on loans, family support, and the housing market. The data from the second quarter of this year is presented in this most current report. These are the key conclusions that came out of it.
Prices for housing decline
The report claims that real estate values in Hungary have drastically decreased. The previous year’s midpoint marked the end of the price increase for housing. The yearly rate of increase in home prices has not dropped since 2014. A number of factors, including the unstable state of the economy, the declining fair value of salaries, and the high interest rates, contributed to the reduction of inflation. Unlike Budapest, where there wasn’t much of a fall, the decrease was more noticeable in the larger cities and the countryside. All things considered, house prices have decreased by a significant 18,5% when taking inflation into account.
Let it go!
Flat rentals are becoming more profitable due to rising rental prices with stagnated home prices. The extremely beneficial result of renting out apartments has raised prices in recent years since the owner of the apartment benefits from both the increase in value of their home and the rental income. However, the overall worth of these apartments wasn’t rising because last year’s property prices stalled. However, the cost of rent did. In this way, both in Budapest and in the countryside, the rental profit grew by 0.5 percent during the last year.
Bringing investors together
According to the research, the proportion of people purchasing for investment purposes has declined, in line with the number of people liquidating their holdings. This is because there would not be enough money coming in from the house. According to telex.hu, there are much better places to put the savings that would be used to purchase an apartment and earn income. A growing number of people have begun to sell the apartments they purchased as investments in light of these considerations. Now that the proportion of people selling and purchasing for investment purposes is almost equal, Hungary’s property accumulation has temporarily stopped.
Arriving
The declining fair value of real estate in Hungarian cities facilitates the purchase of a home with income. They use the average income as the base and a 75-square-meter flat as an example of an average-sized apartment to gauge how difficult it is to purchase a home with money. It took ten to twelve years to reach what is known as the home price to income ratio in the 2000s. Nonetheless, in 2019 it was calculated that one might purchase a flat in Budapest with roughly 13 years of arduous work.
As of late, this has decreased to 11.7 years according to the research. At that point, we use the average salary of a worker in Budapest; still, it would take a person from the countryside about 17 years of employment to afford a flat. In Amsterdam, it takes less than 10 years, in Paris, it takes more than 20 years, and in Prague, the most alarming comparison is that it takes about 30 years with a stable paying job to be able to afford a property. These figures show how the costs in Hungary compare to those in other Member States.
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