Not everyone will be hurt by the fall in housing starts in Hungary

ON THE ONE HAND, THE DECLINE IN RESIDENTIAL CONSTRUCTION WILL FREE UP SKILLED CAPACITY,

which could alleviate labour shortages in the construction industry, reduce waiting times and create more favourable conditions for builders. On the other hand, this relief may be limited due to the reduction in the number of construction companies, said Béla Markovich, managing director of Mapei Kft.

According to Opten's data, the number of construction firms closing in 2024 rose to 6,200, a 23% increase on the previous year. Building contractors were particularly affected, with 3,500 firms pulling the plug, 1,000 more than in 2023.

The easing of the labour shortage may be noticeable in the short term, but if the number of firms continues to shrink, the construction industry could face another bottleneck. Fewer firms will be able to take on fewer projects, which could lead to a renewed shortage of capacity in the medium term, he added.

The renovation market could be a breakout point

With the decline in housing construction, many contractors and professionals are looking for new opportunities, and the renovation market is one of the most obvious directions. In recent years, the construction industry has faced long waiting times due to a shortage of skilled labour and over-booked contractors, often waiting months to start a renovation project.

However, the downturn in residential construction could free up skilled labour, making renovation projects faster and more flexible.

Falling demand is forcing contractors to compete for work, which can offer developers better prices and service conditions. At the same time, the decline in the number of construction companies also means that the capacity of the market may shrink in the long term, so it is important for companies to adapt to the changing market environment, he said.

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