What a year we had! 2020 we will never forget. And it is still not over, we have more than a month ahead. In March, I felt like becoming part of a movie. Virus. Masks everywhere. Distance keeping. Borders closed. Schools closed. Shops are cleared out by a mass of buyers. Is it real?
Then we were over the quarantine, we wanted to believe to be over the worse, while everybody felt it will continue with the autumn.
UNCERTAINTY, unpredictability, fear is surrounding us everywhere.
The city centre is quiet. No tourists. Most people work from home and buy online. Lots of shops closed, evacuated. Lots of employees got dismissed. Small businesses run out of reserves by now.
Thousands of Airbnb apartments are VACANT and put on the market for long-term rent, but there are no more tenants. The majority of foreign students and some expats left. Many Hungarian students and young professionals who study and work from home now gave up their rental apartments in Budapest to move back to their parents and save money. RENTAL PRICES DROPPED 20-30% this year.
There is hardly any movement on the sales market downtown where at least 60% of buyers were used to be investors. Investors are waiting. Waiting to see the economic consequences of this pandemia. Significant price decrease can not be felt though. Those sellers who are not under pressure to sell, WAIT. Most buyers wish to buy at discount prices and if they cannot, they WAIT as well.
The government is introducing NEW BENEFITS for young couples and families to facilitate the market. From 1st of January, 5% VAT again for new flats instead of 27% and it can be even refunded after the purchase. Release of 4% stamp duty payment for families buying an apartment with state subsidy called CSOK (Support for Families buying Homes).
Will these measurements speed up the market or nothing can stop the regression after 7 years of real estate boom?
Nobody knows. Everybody is guessing. And waiting.
Big QUESTION MARKS everywhere. When tourists will return? Can Airbnb flats run as before? Will there be new regulations to control more their operation? Will students, expats, young professionals return from the countryside, from abroad? When? When can small businesses reopen? When can we return to normal life? What rental yields will be achievable? Demand to buy apartments will increase from next year or decrease further?
The real estate market is a roller coaster, a slow roller coaster. If it goes up, people like to be on it to take part of its gains, however if it starts to go down lots of people decide to get out of it and get on the train again when it starts to go up again.
Good question where we are now. On its top or yet on its halfway?
Can we be at the top while neighbour capital cities’ prices are significant higher?
What will happen on other EU markets?
Questions, questions, questions.