The sharp decline is true for all but one Hungarian region; only Budapest saw a 7% rise.

The number of housing construction permits issued last year fell by 29% to 7536 compared to 2012 data.

Last year in Budapest, due to a few major housing projects, more properties were built and the number put to use was 1770. In the villages, only 1270 new properties were built, half of the 2012 figures.

According to Attila Déry, Senior Analyst at Otthon Centrum real estate agency, not only has the number of homes built for sale dropped, but the number of homes for personal use has also decreased.

‘People prefer to buy a ready-built flat, rather than building it for themselves, which means developers end up spending more money on the flat than planned as no one really buys during the construction period. This is significantly increasing the costs, while investment returns remain questionable,” Mr Déry added.

Mr Déry also emphasized the fact that the stock of newly-built properties is finite, which leads buyers to buy previously owned apartments.

In the Hungarian property market, stagnant since 2009, the proportion of new builds is declining.

Source: ORIGO

Words by Tímea Klincsek for XpatLoop.com

Proofread by Írj Jól Szolgáltató Kft.