Those fleeing the Ukrainian war initially traveled further from Hungary, but there are more and more people who have been imagining their future in Hungary for at least a few months – the effects of the war can also be seen in the real estate market.
It is unlikely that there will be difficulties in the rental market due to the needs of refugees arriving in Hungary from Ukraine: very drastic changes would have to take place in the oversupply rental market in order for a problematic situation to develop. At the same time, there are many factors of uncertainty, and the length of the war is unpredictable – we talked to an expert about the current state of the Hungarian housing market in light of the impact of refugees.
The real estate market is moving hard
According to Károly Benedikt, head of marketing and public relations at Duna House, it is difficult to detect rapid changes in the real estate market, but the first days of the war were still characterized by some uncertainty, which is understandable. A new situation has arisen, a war has broken out in our neighborhood that initially filled many housing market concerns, but as it is part of human life that we have to move from time to time, it quickly leveled off.
“It also looked good with the coronavirus: there was an initial, deep crash, but after that, if you inherited an apartment, it had to be sold when a child was born, when you got divorced, you had to move to a smaller one. These are things that no epidemic can stop because if you have to move, you have to, ”Károly Benedikt told the Sofa.
According to him, even at the beginning of the crisis in Ukraine, there was a bit of uncertainty in the market,
THERE WERE THOSE WHO CHANGED THEIR MINDS, DID NOT SELL THEIR APARTMENTS BECAUSE THEY WERE WAITING FOR THEIR UKRAINIAN RELATIVES, OR WERE NO LONGER SURE WHERE TO INVEST THE MONEY THEY RECEIVED FOR THEIR HOUSING.
After a few days, the market situation returned to normal.
Refugees can change the rental market
The market for apartments was moved more easily by the war than by housing sales: many came from Ukraine and many offered their apartments to them. Among the refugees arriving in the first wave, there were a large number of people who rented out their apartments on a market basis, then it was also typical that after a day or two the arrivals continued to travel, but now the more difficult ones who need help with housing have arrived. In response, Duna House also made some of its own flats available to refugees, and they are in constant contact with aid organizations.
“ANYONE WHO COMES FROM UKRAINE IS NOW PLANNING FOR THE SHORT TERM, TWO OR THREE MONTHS. THE MAJORITY WANT TO COME BACK AND THERE ARE THOSE WHO WANT TO GO FURTHER. THERE WAS A BIT OF TURBULENCE IN THE MARKET, BUT IT DIDN’T CAUSE MUCH CHANGE. OF COURSE, IF THOSE INVOLVED STAY FOR A LONG TIME OR EVEN BUY FLATS, IT CREATES A DIFFERENT SITUATION – THE QUESTION IS HOW MUCH THIS WILL AFFECT THE MARKET. ”
The situation is much more difficult in Poland, for example, a lot of people came there, mainly to Warsaw. The market is more saturated, so many people have taken out flats on a market basis or are using short-term housing options, which means more expensive options.
Do not expect a drop in prices
Károly Benedikt said the following about the general characteristics of the Hungarian real estate market: the supply cannot be met by the supply, for the time being, so they are still expecting a price increase.
“PRICES ARE MOVING MUCH HARDER AND SLOWER DOWNWARDS THAN UPWARDS: IF A CRISIS SITUATION ARISES AND ALL LIVING CONDITIONS BECOME MORE DIFFICULT, REAL ESTATE PRICES WILL STILL HOLD ON FOR A WHILE. NO BIG PRICE DROP IS EXPECTED YET “
The price of flats has now returned to pre-coronavirus levels: there was a 20-30 percent drop in downtown Budapest, which is now gone. At the beginning of the pandemic, one apartment could be caught under HUF 100,000, now the rent of a studio apartment is HUF 110-130 thousand, and the average rent of one- or two-bedroom apartments is currently HUF 140-150 thousand.