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Home building permits down 12.9% in 2006

Hungary's building market continued to show signs of a slowdown in 2006, with the number of new home building permits issued in the year decreasing 12.9%, and the number of new homes coming onto the market down 17.6% from a year earlier, the Central Statistics Office (KSH) reported on Thursday.

The number of building permits has declined steadily since late 2003 when the government placed more restrictions on state-subsidized home loans. Observers note, however, that the home market has also started showing signs of saturation. The average area of homes was 89 square meter in 2006, 3 square meter more than in 2005. Permits issued for homes with fewer than 60 square meter were down 26% from a year earlier. Permits issued for homes larger than 100 square meter fell 11%.
The number of new homes fell in the whole country except in the areas surrounding Budapest, where the number of new homes slipped 33%. The number of new homes in Pest County dropped just 2.7%. Permits were issued for 700 holiday homes in 2006, down 16% from 2005. A further 800 holiday homes came onto the market, 14% less than a year earlier. The number of homes in Hungary fell 4,900, or 11%, in 2006.
Almost 80% of these homes were demolished, and about half of these were torn down to make room for the construction of new homes. Permits were issued for 4m square meters of residential space in 2006, down 9% from 2005. Permits were issued for 3.8m square meters of non-residential space. (Bloomberg)