Autumn real estate market overview
22/10/2020
On the 14th October, as part of the Home Creation Program, it was announced that the state housing support system would be expanded with several new elements from the 1st of January 2021.
One example is the reduction of the VAT on housing construction from 27% to 5% which could give a new swing to the appetite of purchasing newly built homes.
The plans also include the introduction of the state subvention of up to HUF 3,000,000 for housing renovations, as well as the remission of the remunerated property transfer tax for flats purchased with the family home creation discount (CSOK.) The exact criteria for the practical use of these elements of the program are yet to come.
Partly due to these measures, the number of interest in purchasing new homes and houses in the first three weeks of October was 40 percent higher than a year earlier. Thus, the 10-40 per cent drop in demand, which began in March and peaked in April in the uncertain situation surrounding the coronavirus epidemic, and the 10-30 per cent decline in advertisements posted during this period have changed significantly. The analysis of ingatlan.com also shows that in the first three weeks of October, the supply of second-hand flats decreased by 8 percent compared to a year earlier, and buyers can now choose from 142,000 residential real estate ads. The demand for second-hand housing fell by 19 percent. Preliminary data of the trade statistics office show that second-hand flats became 6.3 per cent cheaper on an annual basis in the second quarter.
According to real estate market experts, the real estate market is likely to show a volatile face in the coming months, given that the epidemic situation is still uncertain and that many families, - whom are to buy and sell their properties- are currently waiting for the expansion of the above-mentioned state housing support system from 1 January 2020. Nevertheless, we can reasonably expect that no further rise in prices is expected in the real estate market.