Real estate in Hungary

Statistics about the Hungarian real estate

During 2015 house prices increased by 17.71% (17.78% inflation-adjusted), according to FHB Bank’s estimate.  Figures from the Hungarian Central Statistical Office (KSH) are lower — according to KSH, prices of existing dwellings rose by 11.71% (11.78% inflation-adjusted) in 2015, while prices of new dwellings increased by 6.67% (6.74% inflation-adjusted).

 

In Budapest, Hungary’s capital, the mean price of existing and new dwellings increased by 15.53% (14.93% inflation-adjusted) y-o-y in Q4 2015, according to KSH.

 In 2015, credit for second-hand homes rose by 36.5%. Dwelling permits issued were up 38.8% y-o-y during the first quarter of 2016 — boomtime growth figures!

 

However, although total housing transactions rose by 4.9% in 2015, most growth took place in the first half of the year and was concentrated in second hand homes.  A slowdown appears imminent.  In Q1 2016, Hungary’s GDP slowed sharply with only 0.9% growth y-o-y, the slowest for three years, according to the Hungarian Central Statistical Office (KSH). The meagre expansion was due to weak construction and weak industrial growth. The OECD lowered this year’s economic outlook for Hungary from 2.4% to 1.6%.

 Obviously Hungarian real estate agents were very happy in 2015!  During the first nine months of 2015, selling times plunged in comparison to the same period in 2014, according to Otthon Centrum (OC).

     Blockhouse flats required 1.5 months to sell on average, 43.37% less than in 2014.

    Brick-built flats required 3 months to sell on average, 27.64% lower.

    Brick-built family homes required 7.5 months to sell on average, down by only 1.35%.

 

Part of the recovery in housing demand 2014-5 was caused by the government increasing, at the beginning of 2013, the amount of 5-year loan subsidies, the maximum value of subsidized loans, and the loan house price threshold. These measures causing significantly stronger credit demand in the second half of 2013. Demand continued to rise in 2014 and 2015, according to KSH.

         non-refundable subsidy, the family housing allowance (CSOK) became available from July 1, 2015.  It can be used for buying new- and used homes, for apartment expansions, and for home construction.

 On December 15, 2015, the National Assembly lowered the VAT rate for new dwelling units to 5% from the previous 27%, in a further attempt to boost the property market. The new VAT rate will be effective from 2016 to 2019. The amendment also contained other measures to improve construction sector’s performance and reduce red tape, according to the Ministry for National Economy.