Housing crisis to come to Hungary?

This is because of skyrocketing real estate and rent prices. Based on an analysis done by GKI Economic Research Co., more flats should be built to meet the swiftly growing demands.

According to szeretlekmagyarorszag.hu, in 2011, it was financially difficult to pay the rent for only 10 pc of households. This rate increased to 60 pc by 2017. Real estate prices increased very much compared to salaries. Today, one has to work 33 months (42 pc) more to buy a used house than in 2010. In the case of new houses, the situation is even worse.

In Budapest, there are 920 thousand flats. 84 pc of them are in private ownership, 9 pc are rented, while 5 pc are in the ownership of local councils.

According to GKI, the most effective protection against skyrocketing real estate prices is to build new houses and flats, which

needs the involvement of the state.

For example, between 2000 and 2010, on a yearly average, 9,000 new flats were built. This number has only been 3,000 since 2010.

Furthermore, they suggest local councils to pay more attention to renewing the flats owned by them because based on data from 2017, 9,000 of them are now empty. Moreover, the labour shortage in the construction sector is so huge that it results in the reduction of newly-built flats.

According to GKI, it would be important to increase the efficiency of those working in the construction sector. Therefore, a balance should be established between the private sector and the state because today, state orders suck most construction professionals up, and under such conditions, entrepreneurs cannot plan ahead.

The analysis makes it clear that behind the skyrocketing real estate prices, one of the most important reasons is the

growing demand of investors, 

which is boosted by the low base rate of the Central Bank of Hungary.

Interestingly, they say that short-term flat rent, what, e.g., Airbnb does, is not among the reasons causing growing real estate prices. Therefore, the strict regulation of that sector would not ease the problems of those searching for a place to live in. However, it should also be added that the whole analysis was ordered by Airbnb.

Need more? If you plan to come to Hungary and would not like to rent a flat through Airbnb, HERE you can find the best hotels in Hungary. 

Source: szeretlekmagyarorszag.hu