Used housings beating new ones in real estate market

The last quarter of 2017 brought a 12.3 percent increase in prices of real estates, which is the highest in the last 5 years. According to Forbes.hu, the increase in the prices of used housings is becoming slower. However, the construction companies face a critical challenge in building new houses: they simply lack labour force.

The data of Central Statistical Office show that real estate became more expensive during last year, but there was a difference between used and new housings. The increase in prices was not so fast in 2017 concerning used houses, as it changed only 7.4 percent during the last quarter. It was the lowest rise in the last four years. New housings are quite different because their prices increased by 12.3 percent, which is also a record but on the other edge.

There are no satisfying news regarding the construction processes: the lack of labor force causes delays in the case of the smallest (a couple of flats) and the largest (residence blocks with hundreds of flats) projects.

There might be lots of housings that cannot be finished by their deadline in 2020. This is an important issue, as the discounted 5 percent VAT is only valid for housings that will get in usage by the end of 2019. This means that a real estate if being completed after 2020 will come with an increased VAT, which results in 20 percent higher prices.

It is also worth mentioning that though the prices of used housings increased by 7.4 percent in the last quarter of 2017, the increase was much higher in the major cities and the capital: in those areas, the percentage of the rises were two-digit numbers.

In the case of used housings, the demand is the highest for the less expensive real estates.

This means a higher interest for family houses and semi-detached houses in the agglomeration of larger cities. The prices of these housings might be as favourable as of the flats in the central parts of the cities.

Source: Forbes.hu