Hungary’s Housing Market Soars, But Cracks Are starting to Show
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Experts predicted teh impact of the government’s new “Home Start” program last summer, and now the latest housing market statistics are confirming their expectations-with a significant price surge.
- National housing prices jumped 21.3 percent in one year.
- The “Home Start” program appears to be fueling demand across the country, even in villages.
- September data from the central bank might potentially be incomplete, suggesting further price increases are likely.
- Hungary’s price increases outpaced all other European countries in the third quarter of 2024.
Hungary’s housing market experienced a dramatic price acceleration in the third quarter, with national prices increasing by 21.3 percent year-over-year, according to data released by the central bank and highlighted by OTP Ingatlanpont. Is Hungary’s housing market in a bubble? The central bank’s statistics show a 5.6 percent price increase compared to the previous quarter, the largest jump in nearly four years. This follows an 8 percent increase in the first quarter and 3.8 percent in the second.
A Surge Not seen in Years
The current price surge is the most significant in years. In the capital, prices rose by 26.2 percent year-over-year, following a 22.6 percent increase in the previous quarter. Cities saw a 19.1 percent increase, while villages experienced an 18.6 percent rise. These numbers are subject to revision as final data becomes available.
Compared to the third quarter of 2024, prices increased in all regions of the country except the Pest region, with increases exceeding 10 percent and often surpassing 20 percent.
Central transdanubian cities registered a 23.3 percent price increase, closely followed by Northern Hungary at 22.8 percent.
The recently published data supports the assumption that the launch of “Home Start” has further boosted housing prices and indicates that the program has stimulated demand nationwide, even in villages where price increases have substantially accelerated.
– pointed out Dávid Valkó, the leading analyst of OTP Ingatlanpont.
The Central Statistical Office (KSH) also publishes a house price index, providing preliminary data for the third quarter. This index separately measures price changes for new and used apartments. According to KSH data, used apartment prices rose by 2.9 percent in the third quarter, while new apartment prices increased by 5.1 percent. Year-over-year, prices for used and new apartments increased by 21.4 percent and 18.6 percent, respectively.
Hungary Leads Europe in Price Growth
The impact of the “Home Start” program is underscored by the fact that Hungary’s 21 percent price increase in the third quarter of 2024 was the highest in Europe. portugal followed with a 17.7 percent increase, and Bulgaria with 15.4 percent. In contrast, Finland saw a 3.1 percent price decrease, while Cyprus experienced stagnation and Sweden a modest 0.5 percent increase.
We anticipate that housing prices will continue to rise this year, but at a slower pace than in 2025, as the market appears to be reaching its limit by the end of the year.
Dávid Valkó predicted. He expects a renewed wave of demand in the coming months as more people seek to take advantage of the “Home Start” program. Additionally, an increasing supply of new apartments, priced with the program’s limits in mind, is expected to enter the market.
