Home building permit issues climb in Hungary

The number of home building permits issued in Hungary rose by an annual 22.4 percent to 15,274 in the first six months, even as the number of new projects in Budapest declined, data released by the Central Statistical Office (KSH) on Thursday show.

The number of home building permits issued in county seats and cities with populations over 50,000 climbed 71.7 percent to 3,372 and increased by 48.9 percent to 4,784 in smaller cities. In towns, it jumped by 76.9 percent to 4,301.

In Budapest, the number of home building permits dropped by 42.1 percent to 2,817.

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At the start of the year, the government slashed the VAT rate on home building to 5 percent from 27 percent as part of government measures to aid the economic recovery from the coronavirus crisis.

The number of new home handovers grew by 12.8 percent to 9,795 in H1. The number of handovers in the capital climbed by 173.5 percent to 4,532, while the number in county seats and cities with populations over 50,000 dropped by 30.1 percent to 1,817. The number in smaller cities fell by 19.3 percent to 2,125 and the number in towns declined by 26.4 percent to 1,321.

About 64 percent of handovers were in buildings with multiple residences. The average size of homes was 83 square metres.

László Koji, who heads the national association of construction companies (EVOSZ), told MTI that property developers in Budapest have their hands full with projects started earlier. He added that the temporary VAT rate reduction could give impetus to the market.

Takarekbank lead analyst Gergely Suppán noted that home constructions were markedly uneven nationwide, with Budapest leading the pack with 4,532 handovers and Nógrád, Tolna and Heves counties.

This year’s falling permit numbers forecast slacking growth in home construction next year, Suppán said, adding that home construction numbers continue to lag behind pre-pandemic and international levels.

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Source: MTI