Housing

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In the first half of 2021, the value of housing loans reached nearly HUF 4.3 thousand billion, 6.4% higher than in 2020 and 8.9% of GDP. The number and amount of authorisations and disbursements also increased, with those for housing modernisation being particularly high. The repayment moratorium introduced to mitigate the effects of the pandemic was used for 29% of housing loans, down 32% on the previous period.

Rising material and labour costs pushed up housing construction costs by 16% year-on-year in Q2 2021. The main driver of the increase in housing construction costs has been the rise in material costs, the pace of which has accelerated significantly this year due to the significant increase in the price of construction materials on the world market. In the second quarter, dwellings were built at a material cost level 22% higher than a year earlier, while labour costs rose by around 7%.

Rent growth slowed down in August, with rents rising by around 1% compared to the previous month both nationally and in the capital. Despite seven months of steady increases, prices were on average only 3-4% higher than a year earlier. In the inner districts, which provide the backbone of Budapest's supply, rents rose more moderately, by 2.6% over a year, with the most significant increase in the capital being in the transitional districts of Pest (5.0%).

In July 2021, the authorities issued building permits for 66% more floor area overall than the very low base a year earlier. This was primarily caused by the increasing construction sentiment of non-residential buildings (e.g. agricultural buildings), with their floor area authorised up by 88% compared to July of the previous year. Residential buildings saw a 47% increase in permitted floor area, with the increase being more pronounced for multifamily buildings due to the strong base effect.

Housing market activity rebounded in the first quarter of 2021, after the pandemic period last year. The recovery that started in 2014 came to a halt in 2019, with the housing market responding to the successive waves of the Covid19 pandemic in 2020, first with a sharp and then with a more moderate decline. New housing prices continued to rise at a similar pace as before, while growth in second-hand housing prices slowed down and barely exceeded the general increase in consumer prices. Housing prices, both new and second-hand, rose by 5.8% in the first quarter of 2021 compared to the previous quarter.

In the first half of 2021, 9,795 new dwellings were built, 13% more than a year earlier. The number of dwellings to be built on the basis of construction permits and simple declarations was 15,274, 22% more than in the same period of 2020.

The yearbook is a data compilation on construction permits and simple declarations, dwelling constructions and cessations, housing stock, housing market and the management of municipalities. Data on average construction costs and the main figures of housing loans as well as data of dwellings purchased by the National Asset Management Company are also available here.