Property market decline began in Q4 2019, before corona

According to data from and the National Statistical Office, house price decline in Hungary has started in the fourth quarter of 2019 – months before corona hit.


Red line = used homes, black line = new homes, dotted lines = quarter-on-quarter change, solid line = year-on-year price change. Data: KSH,,

Quarterly price change on the Hungarian property market has turned negative in the fourth quarter of 2019, for the first time since 2013, according to new data. Used and new properties have seen a 3% and 1.7% decline in asking prices in the last quarter of last year, respectively, even though the year-on-year change is still in the positive.

It means that the bullish trend was broken months before corona hit. And it hit the housing market hard.

In Budapest, demand for rental apartments has been decimated by the erosion of the middle class and single events like the departure of CEU – while supply has increased after properties fell out of the oversaturated short-term rental market like Airbnb for substandard quality.

Market analysts and real estate agents kept churning out warnings recently on how the end of the lowered VAT on the construction sector will result in a price increase – rather than a decline as everyone expected – and many have been indeed busy trying to buy any eligible property at the peak of the market to qualify for the loan-for-babies program of the government. (If a bank would ever offer you such conditions for a loan, you would cry for an ombudsman. From a state people take it with gratitude. Odd.)

But the hysteria ran out of victims and the market came to a plateau by the end of 2019. And now with Airbnbs empty and waiting for long-term tenants, the knockout effect has started. Since their investment value has declined together with their revenues, properties have suddenly became less enticing investments. And while owners haven’t accepted the new normal yet and asking prices tend to lag behind real-life contracts, the trend is expected to continue in the future.

Inner Budapest districts have seen rental asking prices going down by 25%, but the countryside will probably follow suit.

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