Pre-pandemic mood on the housing market – rise in prices restarts

(Results of survey on housing market of June 2021, conducted by GKI and Masterplast)

The value of the capital’s housing market index has almost reached, the national index has already slightly exceeded the pre-pandemic level. According to the respondents, the price of used dwellings will rise in all districts in the near future, and a double-digit price increase is expected in case of new flats – it turns out from the joint survey of GKI and Masterplast. 

GKI organizes a survey in every quarter in order to assess the prospects of the companies dealing with real estates. 113 such companies answered the present survey. The analysis summarizes the results of the representative survey organized for the civilian population (sample of 1000 people). From January 2020, the survey is carried out with the assistance of Masterplast Nyrt.

Although the housing market has been severely hindered by the epidemic, the subsidies granted for families with child or those expecting their child still provide incentives. According to the current survey, the expectations of real estate businesses in the capital for the next 12 months have improved markedly compared to the first quarter of this year. (This is true for all segments except downtown Pest and the panels in South Pest.) The prospects in Eastern Hungary have hardly changed, however they have improved significantly in all segments in Western Hungary.

Household expectations for home purchase and construction fell sharply in the second quarter of 2020, then had been improving from survey to survey until the first quarter of this year. In June this year, the trend of improving household expectations slightly halted as the households have become somewhat more cautious. In the survey carried out in June 2021, 58,000 households said that they would definitely buy or build a home in the next one year, while 187,000 households had intentions to do so. These figures are almost in line with the data of the fourth quarter of 2020.

Housing market indexes hit the floor in the second quarter of last year as the first wave of the pandemic noticeably hold the demand back. Since then, however, a gradual improvement is noted. The capital housing market index of GKI-Masterplast (which summarizes the expectations of real estate companies and the population into a single figure) increased by 5 points on a quarterly basis and by 13 points on an annual basis. The nationwide housing market index increased by 4 and 16 points. The capital index has almost reached, the national index has already slightly exceeded the pre-pandemic level.

On a national average, a slight majority of survey respondents expect the price of used dwellings to rise over the next 12 months. In rural areas, almost two-thirds of the respondents expect an increase in prices. In the capital, the proportion of those who predict price increases and stagnation does not differ significantly (44-46%).

The awaited recovery in the newly built housing market is expected to be reflected in prices as well. In Budapest, but especially in the rural regions, the proportion of those expecting a price increase is very high, while hardly anyone expects the prices to decrease. 

The apartment rental market is also showing signs of recovery. In case of rental housing in the capital market, a significant majority were still expecting a stagnation of rents in the first quarter of 2021, but at the time of the present survey, those already waiting for the rise were already in the perceptible majority. In rural areas, those waiting for stagnation still represents the majority, however the expected increase in rents also grew in Eastern and Western Hungary.