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Housing market on a rocket ride”


Position - Image Credit:Creative Commons – Barney MossImage Credit:Creative CommonsMatt Biddulph

   As the article clearly states, 2015 saw a return of local and to a limited extent foreign buyers to the Hungarian property market. All indications are that this trend will continue into 2016 as well due to recently announced government backed incentives for young families and local banks increased propensity to lend.   

     The past year of the housing market in Hungary has been characterized by a significant increase in both turnover and prices, with the latter climbing 15% between Q1 2014 and mid-2015. This substantial upturn, however, was largely due to the used home market segment, while there was little good news to report regarding newly built homes. Although there was demand for new homes, construction projects were slow to begin. However, the big announcement mid-December on the VAT cut for newly built homes could completely upset the housing market next year, with development projects to begin again. This was the housing market in 2015.

Late last year, it began to look certain that the rise in home prices would not be reversed, but as we were still waiting for official data, we could only talk about a housing market upturn in uncertain terms. Since then, however, it has became a certainty that the market really has got past the crisis and is now producing higher growth than previously expected.

There are several factors behind this upswing. On the one hand, market confidence has improved significantly, and the financing environment has also benefited the property market. Low interest rates on loans also had a favorable effect on customer decisions. Investors were the first to be lured back to the market by the lower rates, and the brokerage scandals early this year gave new impetus to demand by investors. Their interest in residential property remains high and investors continue to represent the largest group of buyers; however, residential buyers are closing the gap. The jump in demand is evidenced by a significant increase in the number of transactions, passing the magic mark of 100,000 deals last year and potentially nearing 135,000-140,000 this year.





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