In July this year, 6,250 residential real estate transactions took place in Hungary, fewer than in the previous two months and down 10% on July 2010, real estate agency Duna House wrote in its latest analysis.

Compared to June, prices of panel flats declined in all regions except for Western Hungary, where they increased by 17%. The drop was -10% in Eastern Hungary and close to -10% in Budapest.

As for apartments in brick buildings, average prices increased by 4% in Budapest’s inner districts (V, VI, VII). In all other areas examined, prices declined, though the rate was lower than in case of panel flats.

Also, in the first half of 2011, 5,585 new apartments were built in Hungary, a drop of -35% over the same period last year, based on the latest report by central statistics office KSH.

In the same period, 5,877 residential property construction permits were issued, a drop of -36% on the first half of 2010. The decrease in the number completed constructions was similar to that between the first half of 2009 and 2010, meaning construction has dropped by almost -60% in the last two years.

Among the reasons for the decline, Duna House mentioned both the time of the year and the high Swiss franc exchange rate. JP Morgan recently reported that Hungarian households with Swiss franc-denominated mortgages, which were previously the most popular lending product in the country, had seen their repayment instalment’s rise by 55% since the end of 2008.

Many borrowers took out Swiss-franc loans when the Forint was at levels around 165. Analysts said earlier that the watershed at which point borrowers could default on their payments en masse was in the region of 240 forints to the Swiss Franc. The current exchange rate is 261.