housing
At the beginning of the year, the number of new apartments handed over nationwide fell by almost a quarter. The government responded quickly by accommodating the industry with VAT.
Only 2,780 apartments (-23%) were built in the first quarter, the Central Statistical Office (KSH) reported on Friday. The number of new building permits issued at the same time fell by almost a tenth to 4,525.
Debrecen gives Budapest a run for its money
Bucking the trend, more building permits were issued in cities outside the capital than a year ago. Among the county capitals (+42%), the new construction projects planned in Debrecen with a total of 800 residential units stand out. This means that the eastern Hungarian metropolis is suddenly on a par with Budapest. Kecskemét and Székesfehérvár are also showing relatively intensive activity, while in Győr the previous boom has definitely come to an end. Among other cities, Paks is clearly benefiting from a new enthusiasm for building in connection with the ongoing expansion of the nuclear power plant.
In Budapest, barely more than 900 new apartments (-35%) had been handed over by the end of March, but in the rest of the country there were only twice as many. Construction activity has fallen particularly intensively in smaller cities (-21.5%) and in municipalities (-15.5%).
5% VAT until 2026 (2030)
The government has responded to the misery on the housing market: Finance Minister Mihály Varga announced on social media that the reduced VAT (ÁFA) of 5% would be extended for two years. This rate (instead of the usual 27%) now applies to both private developers (for single-family homes with up to 300 m2 of living space) and construction companies (for apartment projects with up to 150 m2 of living space per unit) until the end of 2026. The reduced ÁFA also applies -Rate also for projects that are at least registered by this date and implemented by the end of 2030.
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