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Budapest Property Market Bounces Back As 5000 New Homes Hit The Market In The First Half Of The Year

2016.08.03.

More than five thousand new homes came on to the market in the Hungarian capital Budapest in the first half of this year and some 2 800 homes have been sold already, the business daily Világgazdaság has reported, citing OTP Mortgage Bank data.

Fully 7 500 home constructions have been announced as part of 40 investment projects. Dávid Valkó, an analyst at the bank, said the reduction in VAT on new homes has boosted investment activity. Demand has been stoked by the government’s family home creation subsidy. The possibility of reclaiming VAT on home construction expenses has increased people’s willingness to finance their own construction projects, he added. One novelty is that big investors are announcing in advance where they plan to build homes in the next four or five years. Competition is expected to be intense and it is well worth their while convincing potential buyers to commit themselves, he said.

20160715panelhaz-epitese-obudan-1971Builders at work at the construction of a prefabricated apartment block in Budapest’s District III, 1971

In a March report, the National Bank of Hungary reported that the country’s property market is back on track after a 7-year slump brought on by the economic crisis. An increase in housing prices started in early 2014 and continued in 2015, the report said, pointing out that property prices have now reached pre-crisis levels.

The recently introducted family housing allowance, which provides a non-refundable grant for purchasing newly-built residential property to families with three children or more and a string of other schemes for families and homes with different parameters, has already drawn massive interest from the population. In the first half of the years, there were 61 000 people asked banks for information on the programme, and 11 900 applications were submitted with a total value of HUF 31.9 billion, it was revealed in late July.

via hungarymatters.hu and 24.hu
photo: Gábor Szabó/origo.hu