The Government’s measures aiming to support the construction sector have come to fruition. Thanks to the housing programme, the preferential VAT rate on new homes and active industrial policy, the sector has been growing in a persistent and robust manner, Minister for National Economy Mihály Varga said, commenting on the latest data published by the Hungarian Central Statistical Office (KSH).

Output in the construction sector grew at an unprecedented annual rate of 43.2 percent in the month of January, he pointed out. This means that output has increased overall by some 18 percent since 2010.

The Family Housing Subsidy Programme (CSOK), the preferential VAT rate on new homes, which are supporting both the demand and supply sides of the housing market, have played a major role in the construction sector boom, the Minister noted. Between the introduction of the programme at the beginning of July 2015 and the end of December 2017, CSOK applications of HUF 184bn by 66 thousand families have been received. The upward housing trend has also been underpinned by the significant improvement in Hungarians’ standard of living, behind which the six-year wage agreement has been a key factor, he stressed.

The Minister underlined the fact that the housing market boom had led to a 20.4 percent increase in the number of building permits (totalling 37 997) issued in 2017, the highest growth figure in nine years. In addition, the number of new homes completed in 2017 was 14 389, up by 44 percent year-on-year.

The fact that the volume of construction contracts at the end of the month was up by 108.5 percent year-on-year was highly encouraging and he was expecting that the sector’s expansion this year was set to continue at a rate similar to last year’s, Mihály Varga stated.

(Ministry for National Economy)