Dávid Valkó, an analyst at the bank, said the reduction in VAT on new homes has boosted investment activity. Demand has been stoked by the government’s family home creation subsidy.

The possibility of reclaiming VAT on home construction expenses has increased people’s willingness to finance their own construction projects, he added.

One novelty is that big investors are announcing in advance where they plan to build homes in the next four or five years.

Competition is expected to be intense and it is well worth their while convincing potential buyers to commit themselves, he said.

Republished with permission of Hungary Matters, MTI’s daily newsletter.