The Family Housing Allowance (CSOK) and reduced VAT in the construction sector have caused the residential property market to expand in a dynamic and steady manner in Hungary, and the latest data also reflect this positive trend, Minister for National Economy Mihály Varga said. The Minister’s comments came after the Hungarian Central Statistical Office had reported that in the third quarter of 2017 the number of building permits was up by 33 percent year-on-year, and the number of newly built homes soared by 52 percent in the same period.

The Minister noted that the number of newly built homes had increased dynamically across the country; regions saw evenly distributed growth: building activity has not been limited to large cities.  The pace of growth was even more marked in smaller settlements, he added.

The introduction of the CSOK scheme and preferential VAT rates has substantially contributed to dynamic growth. Favourable trends are expected to continue in coming quarters, as Government measures will boost both the demand and supply sides of the housing market. Since the beginning of 2016, banks have received the CSOK applications of 49 thousand households, of which some 16 thousand families requested grants of some HUF 103bn for the building or purchasing of a new dwelling, Mihály Varga said.

The fact that the volume of new home loans rose by 35 percent year-on-year underpins demand. The housing boom has also been driven by wage hikes due to the six-year wage agreement, he pointed out.

(Ministry for National Economy)