House prices fell 2.5% year-on-year, according to FirmBank’s analysis. But not everyone was wrong with their investment, and the downward trend has already been reversed .
Of course, with persistent demand, sub-markets with a majority of supply will decline and prices may start to rise in more and more locations and supply segments, as is already the case in Hungary and Europe.
Housing prices have been declining
But have fallen nationally between 2009 and 2011 and remained low in 2012 as well. However, in 2013 this trend broke, but data processed since then show that the national process has returned to stagnation. The stagnant course is favorably supplemented by additional information. On the one hand, with inflation declining to zero in the meantime, house prices are stabilizing in real terms. On the other hand, the activity of the National Asset Manager will continue to play a decisive role in the development of the national index, and if these discounted homes were to be discounted, prices would show an increase in some key locations.
The stabilization and reversal of house prices is not a generally observable phenomenon
Some sub-markets are consistently outperforming the national average, and some are already turning around. It can be highlighted as a value-resistant area above the national average:
- the surroundings of Lake Balaton;
- The economically advantageous parts of Western Hungary;
- the areas that are most important for the departure of metro line 4 and the timetable for trains at Kelenföld Railway Station;
- popular parts of major cities within 2 hours by motorway;
- and the reviving downtown of Budapest.
In the downtown of Budapest, in the easily accessible big cities and in Western Hungary, the prices have also changed sharply in the past year.
Key income and employment data for housing demand improved, employment expanded and average earnings increased.
According to the MNB, apart from the temporary deceleration of the first two months, housing loans in forint lending show an increasingly dynamic trend in 2014. The seasonally adjusted value of the indicator published from May this year is almost close to the initial repayment level, as measured in November 2011. If the increased interest in the first half of the year persists, this could have a significant positive impact on the housing market this year. The persistently low level of interest rates on loans, below 6%, will help this process for a long time.
The process of reducing the central bank base rate has not stopped, so deposit and loan rates are at another record low. By August 2014, the average market interest rate had fallen below 6%, with interest rates on the most favorable loans available in the FirmBank range below 5%.