Property 6 May 2019, 9:55am

Number of new homes up 1.5 times in Budapest in first quarter

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In the first quarter of 2019, 3,661 new dwellings were built in Hungary, 7.9% more than a year earlier. The number of homes to be built based on issued dwelling construction permits and simple declarations was 9,639, 2.1% less than in the same period of 2018, the Central Statistical Office (KSH) reported on Monday.

The number of dwellings built increased one-and-a-half-fold in Budapest in the first quarter of 2019. Dwelling construction in Pest county continued to stand out but did not increase compared to the previous year. 54% of new dwellings were put to use in Budapest and Pest county. In spite of an 11% decrease the number of new dwellings in Győr-Moson-Sopron county was several times higher than in the other counties. In the first quarter of 2019 one in five new homes were built in Győr-Moson-Sopron county.

Our seasonally-adjusted data show that the trends of last year continued in 2019. The number of dwellings built has been rising as expected, and in view of the jump of building permits issued in the previous quarters, this trend could last for a longer period. As for building permits, though, we have not seen further increase for a long time now. The number of building permits reached a post-crisis peak in 2017, but the trend has been showing stagnation ever since.

The proportion of dwellings built by individuals went down from 50% to 45%, while that of dwellings built by enterprises rose from 50% to 54%.
49% of dwellings put to use in new residential buildings were in detached houses, 44% in multi-storey multi-dwelling buildings and 2.4% in resident’s parks.
56% of homes were built for sale, 42% for own use and 2% for rent.
The average floor area of homes put to use decreased by 3.7 square metres to 96 sqm.
The national number of dwellings to be built based on construction permits and declarations decreased by 2.1% to 9,639, while it rose nearly one-and-a-half-fold in villages. Builders used simple declarations in 43% of cases. This share was 5.7% in Budapest and was higher and higher when moving towards lower-level territorial units, reaching 90% in villages.
Based on issued new construction permits (declarations) 22% more, a total of 3,615 residential buildings are planned to be built, while the number of permits issued for non-residential buildings was 982, which was of the same order as a year earlier.

The decline in the average floor area of homes have parallels to the rise in the ratio of homes build by businesses, as - mostly in Budapest and large county centres - the floor area of such homes are generally smaller than the homes built by private individuals. This keeps reducing the average floor area. It is also important that besides homes built to sell and built for own use, 2% of the homes are built to rent, which indicates that larger investors also started to see potential in the housing market, and renting houses - either for short or for long terms - is becoming an increasingly accepted practice.