Late last year, Hungarian lawmakers lowered the VAT rate on home construction from 27% to 5% and eased rules for obtaining building permits. Around the same time, the government launched a home purchase subsidy programme for families with children.

The number of completed homes grew by 10.9% to 3,420 for the whole country and was up 8.6% at 981 in Budapest. Among newly built residential buildings, the percentage of detached homes fell from 54% to 43% while that of blocks of flats rose from 35% to 46%, KSH said, noting that the percentage of homes built by property developers, as opposed to private individuals, rose from 43% to 54% in the first half.

Analyst László Balogh of property market website ingatlan.com said the long-awaited turnaround has arrived on the market for new homes, with supply beginning to approach increased demand. Latest data from ingatlan.com also support the market recovery, he said, adding that the number of newly built residential properties offered for sale in July was 25% up from a year earlier.

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