Duna House : Publication of the Duna House Barométer 2022.07.19.

DUNA HOUSE

BAROMETER

The latest property market info from Duna House network

Issue 132

Q2 2022

and June 2022

www.dh.hu

PRIVACY POLICY

Statistical information and estimates published in the Duna House Barometer are the intellectual property of Duna House Franchise Ltd. Statistical information and estimates presented in the Duna House Barometer are for infor-mation purposes only, for the complexity and accuracy of which Duna House Holding does not take responsibility.

Statistical information and estimates published in the Duna House Barometer can be used for individual purposes and responsibility by any person with reference to the following conditions:

•  Statistical information and estimates published in the Duna House Barometer must remain unchanged when presented.

•  Statistical information and estimates presented in the Duna House Barometer must be published only with exact source indication: words "Source: Duna House Barometer" must be indicated right prior or following the text. If in context, it must directly refer to Duna House Barometer as source.

Any use other than the above will imply legal juridical measures. Duna House is entitled to claim the termination of misuse and refund of the entire damage caused. In case of breaching regulations of link posting Duna House is enti-tled to instantly remove the link pointing to the webpage and claim the refund of its damages.

FORTHCOMING ISSUES

DATE OF ISSUE	CONTENT
12.08.2022	July 2022 data
12.09.2022	August 2022 data
12.10.2022	Q3 2022 data (including price indices and housing loan data)

Duna House Barometer is available from the 12th day of each month (forthcoming weekday if weekend) on the webpage: www.dh.hu/barometer

If you wish to receive Duna House Real Estate Barometer or download previous issues visit our webpage: www.dh.hu

GENERAL INFORMATION CONSERNING THE CONTENT OF THE PRESENT PUBLICATION

Attention! The present publication must not serve as grounds for estimating, or making conclusions in relation of Duna House business profitability.

All data, information, estimates and professional statements presented in the publication are developed based on data gained from the activities of Duna House Holding members, or in some cases are based on subjective experience. Application of those for the entire Hungarian property market may require additional corrections.

Data sources - unless indicated differently at the given section - derive from the database operated by Duna House Holding, the content of which is compiled by members of the network upon their individual judgement and information gained from clients. The operator does not take responsibility for the comprehensiveness of the data. Data presented in the present publication is mainly based on parameters of property transactions in major Hungarian cities given by Duna House branch offices and agents.

For newly built apartment market data our cooperating partner is ELTINGA Property Market Research Centre and ECRS Hungary Kft, the compilers of the Budapest Property Market Report.

www.eltinga.hu

2

Q2 2022 AND JUNE 2022 | DUNA HOUSE BAROMETER

CONTENT:

2. Privacy Policy, Forthcoming issues

1. Executive Summary
2. Transaction data
3. Transaction parameters in Budapest
4. Transaction parameters in the country
5. Residential property Indices - National
6. Residential property Indices - Regional
7. Mortgage Data

1. Data on new constructions

1. Sales data, prices, bargaining
2. Demand Index, Demand for individual districts
3. Client profile: buyers
4. Client profile: sellers
5. Quality preferences, Turnover speed

3

EXECUTIVE SUMMARY

DECLINING SALES AND DEMAND, EXPLODING PRICES IN Q2 2022

The changing economic situation is also affecting the real estate market. The Duna House Demand Index showed a steady decline in the second quarter of the year, with the number of transactions also lagging compared to the same period last year. However, price growth did not stop, and all price indices increased in nominal terms compared to the first quarter of the year. Again, the strongest increase was recorded in concrete block indices, interestingly with brick and mortar apartments in Budapest showing a minimal decline in real terms.

The 10,859 sales estimated by Duna House for June 2022 show a weaker turnover compared to May and the same period of the previous year. This is confirmed by the Demand Index, which stood at 62 points in the last month of the quarter. In recent years, the epidemic situation and the related restrictions have reduced the demand for travel, so that even during the pandemic years, with the end of the school year, buyers were more active. This year, however, we are already seeing the arrival of a real summer in the property market. The first half of the market closed with nearly 75,000 transactions, a 10% decline compared to 2021 and a 25% increase compared to the pandemic year of 2020. Experts expect a more subdued real estate market in the second half of the year due to the rising interest rate environment, which could mean more help will be needed by both sellers and buyers.

There was a downward trend also in the mortgage market in June, thanks, among others, to the phased out volumes of Green Home Loans. Duna House estimates that June's 120 billion housing loans contracted are less than in the the previous month and the same period last year, but on a half-yearly basis the factual figures published by the National Bank of Hungary (MNB) for the first four months and Duna House's May and June estimates indicate a 26% increase compared to H1 2021. In the changing interest rate environment, it is no longer common for customers to choose mortgages with a term shorter than 5 years. The proportion of loans with a 10-year fixed rate or more is the highest, at 85-90% nationally. In Budapest, the average loan size is mostly north of HUF 20 million, while in rural areas less is enough to buy a home. 25.2% of borrowers also applied for the Family Home Allowance (CSOK), which is a 7 percentage point drop in popularity compared to the previous quarter.

Along with an increasing turnover speed the market is still characterised by rising prices, with transaction data showing that the more expensive properties above HUF 40, 50 and 70 million dominate the market at a national level. In Buda, 56% of properties sold were priced above HUF 900,000 per sq. m., while in Pest one-third of transactions fell into this price range. Unit prices in County Pest were also in the top group, with 32% of sales transactions concluded at prices reaching or even exceeding HUF 600,000. The trend varies by property type, with brick and mortar home prices falling in the East and West of the country, and showing a 22% rise in Buda, but concrete block homes rising by a record 25-36% across the country and in the capital, too, compared to the previous quarter. New-build properties have not become cheaper in the last quarter either, with the price per sq. m. of new homes exceeding HUF 1 million in 13 districts of the capital. Most of the apartments are on offer in districts 9, 11 and 13, with 73% of the apartments in development projects coming on the market sold almost immediately in the second quarter of 2022. According to current data, 4300 properties are still waiting for a new owner.

Further information:	Duna House Holding Nyrt.
Benedikt Károly • Head of PR and analysis	H-1016 Budapest Gellérthegy str. 17.
[phone]	[phone]
[e-mail]	www.dh.hu

3 INTERESTING FACTS:

• More than half of the properties sold in Buda fetched prices north of HUF 900,000 per sq. m.
• The regional Concrete Block Price Indices exceeded 300 points in the entire country.
• Concrete block units are selling fast, within 2 months in the countryside and 2.5 months in the capital.

4

Q2 2022 AND JUNE 2022 | DUNA HOUSE BAROMETER

TRANSACTION DATA

DUNA HOUSE TRANSACTION NUMBER ESTIMATE (DH-TE) AND MORTGAGE FORECAST

Duna House presents its monthly Transaction Number Estimate (DH-TE) and Mortgage Forecast below, showing that in June 2022 10,859 property transactions were concluded and residential mortgage contracts worth HUF 120 billion were signed in the whole of Hungary.

Volume of residential property transactions conclueded		Duna House transaction number estimate
between private individuals		(DH-TE)
(Hungarian Central Statistic Office)

*Duna House transaction number estimate 2022		HCSO annual data

January February March

May

June

July

December

Summer has kicked off in the real estate market. In June 2022, the 10,859 sales transactions appearing in the estimate of Duna House show a weaker turnover compared to both the previous month and the same period last year. This represents a drop of 13% and 20% compared to May and June 2021, respectively. This means that according to Duna House the first half of the year saw nearly 75,000 transactions, 10% less than in 2021 and 25% more than in the epidemic-ridden year of 2020. Experts forecast a more subdued real estate market in the second half of the year due to the rising interest rate environment, so both sellers and buyers may need more help.

The mortgage market, too, saw a downward trend in June, due in part to the volume of phased out Green Home Loans. Duna House estimates that housing loans worth HUF 120 billion were disbursed in the first month of the summer. This represents a decrease of 13-15% compared to June last year and May this year. On a half-yearly basis, based on the factual figures of MNB, the National Bank of Hungary and on the May and June estimates of Duna House, a total of HUF 753 billion of residential loans were contracted for, which represents an increase of 26% compared to the first half of 2021.

THE TABLE BELOW SHOWS MONTHLY TRANSACTION VOLUME ESTIMATES OF DUNA HOUSE.

	JANUARY	FEBRUARY	MARCH	APRIL	MAY	JUNE	JULY	AUGUST	SEPTEMBER	OCTOBER	NOVEMBER	DECEMBER
2020	9917	13,117	11,100	5971	8400	11,186	13,125	11,923	12,708	12,200	11,369	10,354
2021	11,185	14,569	15,630	13,511	14,198	13,615	11,185	11,304	11,807	11,526	11,022	11,422
2022	10,815	13,793	14,548	11,911	12,519	10,859

Methodology behind DH-TE: Regardless of the time of year, the most important indicator of the real estate market is the annual number of sale transactions. The DH-TE figure is an estimate published by Duna House and it reflects interim approximate data. The estimate is based on the number of monthly property transactions brokered by Duna House and the estimated market share of Duna House. The estimate of the current monthly market share of Duna House is based on the following indicators: 1. Data published by the Hungarian Central Statistical Office on transactions among private individuals. Since the Statistical Office publishes data with several months' delay, market share can be adjusted retroactively which also results in a more accurate estimate as well. Please note: After 2016 and as a consequence of the boom in newly-built apartments, pre-contracted purchase transactions appear in the statistics of the Statistical Office with a delay of several months or even one or two years, after the capital transfer tax has been levied, which results in anomalies in the statistics. 2. The number of Energy Certificates issued; 3. Subjective assessment based on other management information from Duna House Holding. Please also note that DH-TE data cannot be used for defining the volume of transactions brokered by Duna House, or for estimating the business profit of Duna House Holding or for the drawing of any related conclusions.

5