Report: Home purchase subsidies could cause labor bottleneck


With the mass exodus of construction personnel to the West, Hungary could experience a serious shortfall as the industry, which recently received a boost through government subsidies for home purchases, is unable to meet rising demand, economic daily Világgazdaság reported today, citing a study by the Fiscal Responsibility Institute (KFIB). 

The government’s recent measures include home purchase subsidies for families who commit to having children over the course of ten years (CSOK) and a decrease in VAT for purchases of newly built homes, from 27% to 5%. According to the KFIB study, these incentives could create a spike in the construction sector that cannot be met by the current pool of qualified labor, as many workers have left Hungary in search of more lucrative prospects, the daily reports.

The KFIB said that it could take 3-4 years for the sectorʼs labor pool catch up with demand, which is precisely when it anticipates a drop in demand, and incidentally, when these subsidies are expected to wind down.

According to Világgazdaság, 270,000 Hungarians are currently employed in the construction sector, a decrease from approximately 330,000 in the  mid-2000s. Hungary’s building association EVOSZ had already predicted last year that there would be a shortage of qualified labor in the sector, the daily added.


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