Cycles of the housing market in Hungary from the economic crisis until today

László Harnos


The aggregate value of real estates in Hungary is approximately 30–40 trillion Hungarian forints. Unlike the international practice, the behaviour of the Hungarian housing market segment was subject to only a few pieces of research so far, and statistical data is also limited in this regard, even though this constitutes about half of the total estate of households. Accordingly, the cyclic behaviour of the housing market in Hungary will be analysed in the study based on four indicators measured by the Hungarian Central Statistical Office, which are the average price of used residential properties per square meter, the amount of remitted mortgages and subsidies, the number of residential property transactions, and the number of properties built. In order to better understand the nature of the cycles, the inflexibility of residential property stock will also be examined together with the effect of expectations of market operators with the assistance of the indicators published by GKI Economic Research Co. The cyclic behaviour of the Hungarian housing market may be explained primarily with business cycles, but state subsidies and mortgages also affect the variations, since there is a significant positive correlation between these factors and the prices of new residential properties. Accordingly, the increasing lending and the high amount of subsidies can generate a price bubble on the housing market. The stock of second-hand residential properties looks more flexible compared to that of new ones. However, the expectations of market operators do not have a demonstrable effect on the Hungarian housing market.


property market; housing market cycles; asset price bubble

Full Text: