The average selling price of residential properties have grown by 14.1 percent nationwide, the nominal price level has surpassed the former high of 2008, and the real price could reach the level before the financial crisis this year. However, according to the analysis in the OTP Residential Property Value Map, this process had already happened in Budapest last year, meaning, that apartment prices in the capital are at an all time high.
The real estate boom was over in 2016, but the prices didn’t stop rising yet. In the capital, the price growth rate was 23 percent, but certain districts that are the most seeked out for investment purposes outdid the city’s average; such as the inner city districts (V., VI., VII., VIII., IX., XIII.) and the properties in the Buda districts (I., III., XI. and XII.) On the top of the list, we can find the 5th and the 7th districts, with a price increase of over 35 percent.
It was also in the V. district that leads Budapest’s ranking of the highest price per square meter, with 610 thousand Forint per square meter, with the second most expensive district (I.) only being over 500 thousand Forint. In the districts II., XII., VI., XIII., XI. and VII. this rate is over 400 thousand. On the other end of the spectrum, the districts XXIII., XXI. and XX. districts are below 250 thousand Forint.
With regards to the type of the real estates, for the past several years the engines of growth had been the apartments in housing estates, where the prices have grown with 16 percent. In the case of brick houses, the growth was 15 percent, and with family houses the price increase was 8 percent.
Similarly to last year’s prices, the housing market traffic grew with about 14 percent. The number of transactions was lower last year, than the year before in fourteen districts – typically in the inner city areas of Pest and in certain parts of Buda. By contrast, almost all of the areas that have a growing transaction traffic are in the Pest side of the city, located in the cheaper fringes. Last year the traffic lowered to below 40 thousand.
According to David Valkó, leading analyst of OTP Mortgage Bank, ”Moving to the more affordable fringe areas signals, that along with investment oriented customers, the number of people have also grown who need to move due to their live’s circumstances – moving to an apartment independently, marriage, growing family, etc. We need to add, that the traffic in these areas is lower already, which makes for a more spectacular growth.”