New homes cost 8% more on average than in the previous quarter, the report found. The average price of a new apartment is now HUF 76 billion in Budapest. There is substantial variation as the per sqm price reaches HUF 2 million in the most expensive districts of Buda and inner Pest but remains below HUF 800,000 in the outer Pest districts.

District 5, which used to be the most expensive, is now ranked third with HUF 1.905 million per sqm, while District 12 is second with an average price of HUF 1.935 million. The most expensive area at present is District 2, where new homes cost HUF 2.042 million per sqm on average.

Districts 6, 7, 8 and 11 are above the average, and District 3 was measured at exactly the HUF 1.1 million average. Districts 9, 13 and 14 are also above HUF 1 million, while prices decrease as we move towards the outer districts. The cheapest is still District 23, where a new home costs HUF 727,000 per sqm, but districts 4, 10, 19 and 21 are also under HUF 800,000.

The highest number of newly built homes is available in District 13, followed by District 11 on the Buda side. However, the number of new homes available is between 10 and 50 in 9 out of 23 districts.

What is driving prices?

Factors behind the increasing prices include strong demand (developers sold more than 2,500 new homes between August and November, the most in the past six years), the return of the 5% VAT rate, new family benefits, and also the appearance of demand deferred due to the pandemic and the high VAT. The most recent quarter was also fuelled by the new green loans, and many people also decided to buy now for fear of rising interest rates. The number of new homes on the market is currently below 6,000, the lowest since 2016.