Up to the end of September 2016, 21 414 building permits have been issued, which constitutes a two-and-a-half-fold increase compared to the same period of the previous year. The rising number of building permits is being translated into stronger construction data regarding residential properties. In the initial nine months of the year, 5307 residential property units were completed in Hungary, up by 14 percent year-on-year. This growth is the indisputable consequence of the Government’s housing programme.

According to a recent report by the Hungarian Central Statistical Office (KSH), output in the third quarter was a major determinant in the overall improvement in data from Q1-Q3 2016. In the third quarter, 7275 new building permits were issued and registration applications were recorded. These signals growth of 140 percent, year-on-year. Output volume in the building of residential properties also rose significantly, by 20 percent.

It is another favourable sign that in the first three quarters of 2016 the share of units built by enterprises rose from the former 41 percent to 51 percent. Construction companies were even more active in Budapest and cities with county rights. In the observed period, 71 percent of residential property units were built by construction companies, well above the national average.

In the initial nine months of the year, some 20 000 families have applied for the Family Housing Allowance (CSOK), for funding of HUF 56.5bn. Low interest rates, the improvement in employment and income trends have also encouraged households to invest in residential properties. According to data compiled by the National Bank of Hungary, the volume of new housing loans soared by some 40 percent year-on-year.

Thanks to a favourable economic environment and the easing of CSOK eligibility criteria in September, the Ministry for National Economy is expecting that the upward trend in the construction sector is set to remain in place in the coming quarters.

(Ministry for National Economy)