Growth in home construction permits slows in Q1
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In the first quarter of 2018, a total of 3,394 new homes were built, 65% more than a year earlier. Based on issued home construction permits and simple declarations, the number of homes set to be built grew by 3.4% to 9,850 compared to the first quarter of 2017.
In the first quarter of 2018, compared to the corresponding period of the previous year, the number of dwellings built increased threefold in Budapest and grew dynamically in towns and villages as well, data from the Central Statistical Office (KSH) show. The number of completed homes increased 64.7% year-on-year to 3,394 in Q1.
The proportion of dwellings built by individuals fell from 58% to 50%, while that of dwellings built by enterprises increased from 41% to 50%. The average floor area of homes put to use decreased by five square meters to 100 sqm.
The number of homes planned to be built increased in towns and decreased in Budapest and villages. Builders used simple declarations in 34% of cases. This share was 4.8% in Budapest and grew higher moving towards lower-level territorial units, reaching 94% in villages.
Based on new construction permits (declarations), 3.0% more, i.e. a total of 2,965 residential buildings, are planned to be built, while the number of permits issued for non-residential buildings decreased year-on-year by 16% to 978 units.
The number of home building permits issued in Budapest fell 8.2% to 4,035 in Q1, while the number issued in county seats and cities with over 50,000 residents rose 14.5% to 2,146. The number in other cities was up 28.7% at 2,602.
The rate of growth in home building permits has slowed markedly after increasing more than 20% in 2017, perhaps as builders anticipate the VAT rate on home construction reverting to 27% from 5% from the start of 2020, observed state news agency MTI.
Data on home construction and building permits issued in the first half of 2018 will be published by the KSH on July 30.
Home price growth levels out
Home prices in Hungary grew 13.8% year-on-year in the fourth quarter of 2017, at the same pace as in the previous quarter, a gauge of the market by the National Bank of Hungary (MNB) shows, as reported by national news agency MTI on Friday.
The pace of growth in Budapest slowed to 13.3% in Q4, down from 13.7% in the previous quarter. The pace of growth in other cities decelerated to 12.2%, from 14.7%, but price growth in smaller communities picked up to 17.9%, from 11.6% previously.
Among cities, prices continued to rise at the fastest annualized rate in the Southern Great Plain region (15.6%) and Southern Transdanubia (15.0%), MTI noted.
The biggest slowdown was registered in Central Hungary, where price growth slowed to an annualised 6.2%, down from 15.4%, and in Northern Hungary, where it decelerated from 9.2% to 6.7%.
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