Is order restored in the property market?
In recent months there has been a huge chaos in property pricing, with many people looking to make a quick buck this year, resulting in completely unrealistic advertising prices. And private advertisers, less familiar with the property market, have used unrealistic advertising prices as a basis forfurther unrealistic pricing. But what happens now? Zoltán Patai, RE/MAX Vision consultant, analyses the current situation.
It often happened and still happens that a property with a fair market value of HUF 100 million was advertised between HUF 80 and 160 million, typically by private individuals, but often also by real estate sales colleagues. Of course, the trend was more towards overpricing than underpricing. This is partly due to the exaggerated expectations of this year's property market in the media, but also to the fact that the articles published were unfortunately not read by property owners. Savvy investors have of course waited and waited, because it never makes sense to buy in the noise of the market.
This year there has been and still is a significant price increase and higher real estate market turnover, but this is only typical for certain segments of the market and certain prime locations, typically for second-hand properties in Budapest around HUF 50-80 million and 1-2 bedroom new-build apartments. The picture is quite different for apartments above 150 million, which are already expensive in Hungary, and for example for detached houses, as well as for areas outside the metropolitan agglomeration. In these areas, both price and sales growth have fallen far short of hopes and dreams.
As a result of hectic pricing and panic pricing in the lowest value bracket, price-value ratios have also been significantly disrupted and in many segments the real price differentials that had previously existed have collapsed (e.g. new build and panel flats).
As a real estate adviser, I would suggest that if the buyer can, it is worth looking in a higher price bracket rather than the lowest one, because 10-15% more can buy a much better value property. Mortgage loans with relatively good conditions are already available on the Hungarian market. Thus, for a slightly higher repayment, you can get a property with a significantly better value and in a better location than in the overpriced lower category. Of course, ratios will settle over time, so this will not be the case forever.
Based on my experience, in the cheaper price range (40-50 million HUF) in the suburbs of Budapest and the agglomeration, private advertisers have often undervalued their properties and have been happy to sell their property to the first bidder who offered the full price or who bargained relatively little, while they could have sold their property at least 5-10% higher by bidding in this category, which is now fully established. Individuals who sold their property in 1-2 weeks were very likely to have sold it below cost.
Due to the overpricing, many properties have been "overpriced" (price-changed advertisements, which buyers have seen too many times, are received with suspicion and avoided), the funds released from government bonds have been largely invested, leaving property owners unable to sell their properties.
Real estate analysts have also been revising their forecasts and the previous optimism has been replaced by reality. It is primarily the economic performance of a country and changes in public housing subsidies that determine the long-term movement of property prices and in this respect the year 2025 is unfortunately not at all outstanding. Of course, inflation remains high, which in addition to spending and wages, will affect the new housing market and housing renovation due to rising construction materials and wages, so price increases will not stop in the housing market either, but are expected to move in a predictable direction.
In the current advertising market it is very difficult to find information, even for professionals, so in such a noisy market it is especially worth using the services of real estate consultants and sales agents, because even with the fees paid, overall significant additional income or savings can be achieved by using experts.
Do you think you have as much real estate experience as a real estate salesperson who learns the real details of dozens of real estate transactions every day? How many properties have you sold in your lifetime?
Is it worth risking the sale of an apartment or house, the biggest asset of the average family? Not to mention the enormous amount of time, energy and expense involved in selling and buying.
Are you sure that you can focus on your prospects at work? Are you able to turn a potential customer into a buyer?
Can you close a transaction in a week? That's about how long you have, otherwise the buyer will move on...
Ready for a bid?
Do you have adequate legal and technical knowledge? Do you know a reliable and available loan officer, a lawyer, a structural engineer, an energy engineer, an interior designer, a surveyor?
If you are thinking of entrusting the sale of your property to a professional, please contact me!