How many months’ gross average salary for a new apartment?

Napi.hu reported that according to a recent survey the price of a new 70 m² apartment in the Czech Republic, Poland and Hungary equals 7.1, 7.2 and 7.8 years’ gross average salary, respectively. In Belgium and Germany people only need to save up 3.2 and 3.3 years’ gross average salary, respectively, to buy a new apartment with the same floor space. In the UK, however, they need to save up for 10 years to do the same.

Generally speaking, the more developed a European country, the shorter the time needed to save up for a new apartment. The UK is an exception because property prices are boosted by foreign investors and the demand created by immigrants and expat employees working in the UK.

Last year, the average price of 1 m² of new apartment floor space in Prague, Warsaw and Budapest was 2020, 1760 and 1190 euros, respectively.

Austrian Tax Authority has its sights on Airbnb

According to hvg.hu the Austrian Tax Authority demanded business-related information from Airbnb and other private accommodation providers to find out the amount of revenues made and whether those offering their flats as commercial accommodation are paying taxes on such revenues. The Austrian Finance Ministry said negotiations are still pending and they have contacted Airbnb and the other platforms directly.

The biggest complaint of the authorities is that these sites are paying VAT for the mediation services but not for the accommodation itself. Private accommodation providers are a thorn in the eye of big hotel chains, too, because hotels are losing profits over their online competitors. According to an Austrian accommodation industry spokesman they are demanding equal requirements and equal rights for all market players.

A new area of Tax Authority investigations

According to napi.hu the Hungarian Tax Authority has been making undercover test purchase and rental transactions on the residential property market since early July, including the increasingly popular Airbnb properties. Anyone failing to issue a receipt or an invoice for the money taken risks fines of up to one million forint and those conducting market activities without a license may face further inquiries and penalties.

Airbnb and commercial accommodation services are subject to 18 per cent value added tax. Those offering their apartments for rental on the internet may be exempt from VAT if their annual turnover does not exceed HUF 6 million. According to market experts 80 per cent of all Airbnb-transactions are concluded on the black market which also results in constantly increasing rental prices.

Turning point on the residential property market

Napi.hu reports that while the Q1 figures published by KSH, the Hungarian Central Statistical Office paint a decidedly encouraging picture of the domestic residential property market, we are actually approaching a turning point now. The price hike is about to trail off, the supply increases and things are getting back to normal in a previously demand-driven market. One of the reasons of the increasing supply is that the effects of the newly introduced Family Home Allowance (Családi Otthonteremtési Kedvezmény, CSOK) are smaller than expected and many a former foreign currency loan debtor realizes how tight their situation actually is, and instead of paying exorbitant instalments decide to sell their property. As a result of the unexpectedly big supply the number of sales transactions may even surpass 2014 levels in 2015.

Seven-year record in new apartment sales in Budapest

Hvg.hu reported that all he available apartments ready for moving in may have been sold by the end of the year. According to the “Budapest New Flat Value Map” compiled using data supplied by developers and sellers, 1800 apartments were sold between January and June. District XI was the most popular, with 400 apartments, followed by District VIII and XIII, with 300+ apartments sold in each by the end of June. There were 530 apartments for sale in Budapest at the end of June, not counting about 600 apartments under construction. This year about 1500 apartments built for sale will be handed over to their new owners in about 100 different projects, but there would be immediate demand for more. Well-designed developments’ pre-sales figures improve, i.e. more and more buyers pay deposit for apartments before they are built or even before the start of construction works.