More state initiatives needed to reach homebuilding target

According to 2018 data from the Central Statistical Office (KSH), last year saw a 23% growth in new apartment construction compared to 2017. Even so, this number still remains below what is needed. Experts at Új Ház Centrum believe that further initiatives by the state are necessary, especially to address unequal growth in different regions. While Budapest and Pest County saw a 40% increase, the other regions performed well below this level, they note.

In addition, the proportion of homes built by natural persons has decreased, which suggests that 5% fewer families than in 2017 have initiated construction, Új Ház Centrum says, citing the KSH. The Hungarian housing stock is aging, and in order for the volume of renewal to be optimal, a total of 40,000 new properties per year would be need to be built and delivered.

At the moment, however, Hungary is still delivering below half of the required target, which means that the quality of life has not significantly improved from this point of view, the press release observes. It notes that a new package of measures announced by the government is a good direction for further growth in the construction industry, but further expansion of the public incentive package would be needed to achieve target numbers.

"The village home purchase subsidy program (CSOK) is considered to be a very good opportunity to rebuild the housing stock in the rural micro-regions that are lagging behind, but we consider it necessary to increase the amount of resources needed to make it felt," Új Ház Centrum analysts explain. They also believe that the energy-related modernization of old buildings and the use of renewable energies should be promoted, not only saving families overhead costs, but also reducing negative impacts on the environment. As this is in line with European Union directives, they note, it could become feasible by extending and making the Otthon Melege (Warm Homes) program more flexible.

"Still, these government measures are not worthwhile if the shortage of professionals in the sector that we are experiencing now persists," the press release points out. Új Ház Centrum experts think the government should make special efforts to promote manual work and to bring Hungarian professionals back from abroad. Finally, they observe, innovative construction solutions that are accessible abroad should be made widely accessible in Hungary as well, even via non-refundable support.