This March, the number of apartment purchases has set a record when considering the last 10 years. The increasing tendency of property purchase in Hungary can be explained by several reasons, including the biggest home creation scheme launched in 2021. Furthermore, we can also get an insight into how buyer preferences have changed as a result of the pandemic.
Based on the data of the real estate agency Duna House, this March, 15,630 flats were purchased in Hungary, which is a record number considering the last 10 years. This is 40% more than the number of sales registered in the same period last year, and even 7% higher than in February when there was already a record-high number of apartment purchases in the Hungarian real estate market.
The record number can be explained by several reasons, one of the most important of which is the new housing subsidies introduced in 2021. In addition to the ‘CSOK’ family housing allowance and subsidised ‘baby loans’ that can still be applied for, VAT on new homes has been reduced again from 27% to 5%. Furthermore, applicants for the ‘CSOK’ family housing allowance can also claim back a 5% VAT on newly-built homes. The property transfer tax – by default, 4% of the purchase price – does not have to be paid by home buyers using the family housing allowance.
In addition to the new housing subsidies, home loans are still very cheap, which can be the other reason why several Hungarians have decided to buy an apartment now.
Presumably, the bank interest costs will rise significantly soon, which could make housing loans more expensive in the upcoming months. Accordingly, many Hungarians were more likely to bring forward their planned purchase by a few months.
As Hungarian news portal Bankmonitor reports, the pandemic has also had an impact on customer habits.
As a result of the long period spent in confinement, the environment and the size of the apartment have become more important than the location.
There has been an increase in interest in larger properties with gardens. The increased number of sales contracts may also indicate that families living in smaller apartments in the city centre intend to exchange their homes for a more spacious apartment with a garden that can meet their new needs.