Last year, movements already could be felt about building new homes, and this is expected to be continued.
In 2016, the number of new homes reached 10,000-12,000, and almost 25,000 building permits had been issued by the end of the year. Most of the new built projects are to be expected in the Budapest region, and its agglomeration, but regional centers and towns might also see a rise.
Budapest alone is seeing more than 330 ongoing new residential property developments, and while some of most likely won't finish before the second half 2018, these projects offer more than 20,000 new residential apartments in the next two years.
The three major factors behind this huge uptick of residential property construction are
1. the reduced value added tax payable for new home construction - the VAT has been reduced from the prohibitive 27% to a more reasonable 5%
2. the Hungarian housing subsidiary program CSOK
3. and last but not least the particularly low interest rates on housing mortgages: they can sometimes be as low as 3 or 4 %, which is a real deal under the current market conditions.
While the demand is clearly very high, the property market in Budapest continues to grow and attract more investors. Rental fees also keep growing at a reasonable rate, and renting out a good quality apartment is generally easy in the central areas of Budapest.
