Hungary’s housing market boom continues

Hungary’s housing market boom continues

Here is the end of the 5% new residential property VAT. The question is how the change will affect the Hungarian housing market?
According to the summer announcement, the government does not intend to extend the validity period of the 5% VAT on new residential properties which is in effect until December 31, 2019. ELTINGA, which is the brand name of the ELTEcon Centre for Real Estate Research, has made a study to answer the most important question: how the change will affect the Hungarian housing market?
The effects of the change cannot yet be fully assessed, but it seems certain that the 22% rise will have a serious impact on the building of new homes paid after January 2020. The Hungarian ecological site, Portfolio.hu summarized the results of the Budapest Housing Market Report. First, the restoration of VAT reduces new housing projects by 4500 dwelling units per year, which means less than 10 thousand new apartments will be built in 2020. The supply of new homes in Budapest cannot keep pace with the high demand and property prices continue to show signs of growth. Within the housing market supply, most of the residential properties available are used homes, and the price difference between used and new residential properties moves dynamically. When the price of new homes is increasing, the price of used homes will also go up.

Reference: Portfolio.hu