How long can the rally last?
napi.hu 15 January 2017 – Hungarian construction industry output is growing fast. According to market analysts, however, the number of restrictive factors is growing, too. A poor 2016 performance meant a very low base which supported a spectacular relative increase in 2017. Development projects financed by the EU and residential construction drive the industry forward. Growth is set to continue in the next few months: the volume of orders in November was 110 per cent higher than a year before. That said, a lack of workforce and the resulting increase of expenses pose significant problems for construction companies. Also, the future of the discounted VAT rate levied on residential projects is still not clear and if the reduced rate is cancelled the willingness to start new projects may decrease.
New apartments may flood the market
napi.hu, 04.11.2017 – A leading real estate expert said as a result of the 5 per cent preferential VAT rate that is expected to expire in 2019 the number of newly built apartments will become available on the market in the next couple of years will exceed even today’s figures.
There is an apartment construction boom in Hungary which, apart from the reduced VAT rate, is also due to CSOK, the Family Home Allowance. On a year-on-year basis the number of new apartments completed grew by 50 per cent in the first three quarters of 2017. The average price per square metre in Budapest, the Western and Eastern regions of Hungary is approximately 650-700k HUF, 360-400k HUF and 350-380k HUF, respectively. The differences are even greater for pre-owned apartments: these properties are three times more expensive in Budapest than in other parts of the country.
Apartment boom at Lake Balaton
napi.hu, 24.05.2017 – Many new apartments are being built at Lake Balaton and prices at Lake Velencei are also increasing. According to figures published by KSH, the National Statistical Office of Hungary, holiday home construction is also on the upswing. At Lake Balaton apartment development projects are also intensifying. Judged by the number of planning approvals and properties in the blueprint phase the number of completed apartments will peak in the next few years. Buyers increasingly prefer newly built condominium properties with a panoramic view directly at the lakeshore. These command significantly higher prices, not only on account of their better features but also because the number of building plots with direct connection to the water is diminishing.
Even though prices at Lake Velencei are lower compared to those of Lake Balaton, some factors put an upward pressure on prices there, too. First, the effects of the bourgeoning apartment market of neighbouring Székesfehérvár can also be felt in the surrounding area. Second, some settlements around Lake Velencei are comparatively close to Budapest, which means they can offer a viable alternative for buyers from the capital.
Experts expect a boom in apartment construction
napi.hu, 03.04.2017 – According to experts the number of apartments constructed this year may rise significantly, but a change in VAT legislation and the lack of skilled workers may have an unwelcome effect on the construction industry. A recent survey showed that the number of condominium apartments completed this year will reach 2010 highs, but even last year’s 10 thousand was a four-year record. Experts base their estimate on the number of planning applications mainly in the periphery of Budapest, in larger Hungarian towns and in the vicinity of Lake Balaton, mainly as a result of the 5 per cent VAT. This VAT rate will probably be in force until 2019 only, so – due to the time requirement of planning permission procedures – developers have only one year left to start new projects.
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