How did the real estate market start in the New Year? The expected fall back has really reached Budapest?
We just left behind the holidays and we are already at the end of January. I just read an article of the largest Hungarian real estate portal publishing the market figures of Q3 2019.
The number of sales of second-hand apartments in this period dropped over 80% in Budapest and by 56% in general within the country. It is a huge fall back. Such decrease was forecasted already in my last blog published in early November (https://www.connectbudapest.com/2019/11/04/fall-in-budapest/).
At the same time, the number of advertisements published by private sellers increased by 57% in the same period in the capital. More and more owners decide to put their apartments on the market now.
The property market seems to have reached its top after a continuous price increase since 2013. After so many years of a sellers’ market, a buyers’ market can begin. The sellers who want to sell their apartments need to accept a larger discount while negotiating with the buyer or drop the advertisement price to generate interest for their property. The supply of apartments for sale keeps increasing while the number of buyers is pretty low. Buyers can have a better position from now on.
The fall back hits especially the larger apartments which are of higher value. Studio apartments around 100-120,000 EUR still selling relatively fast as their supply is low. Small sized 1 bedroom (120-140,000 EUR) and 2 bedroom (up to 150,000 EUR) apartments in good condition are also pretty much sought after by local buyers. But the interest for higher value and larger apartments fall back a lot. Even the luxury market stopped which was going very well over the past years. Many of my clients with a luxury property portfolio report about zero sale completed in 2019.
It is true, the year just started and we do not know yet what it brings. However if you were considering the buy a real estate, then it is certainly a good time to make a deal. If you are a property owner who got into the market 5 years ago to benefit from capital growth, then it might be the time to turn your investment into cash. The continuous weakening of the HUF against the EUR decreases about 10% your return, but you can still make an excellent profit.