Dwellings and Housing Market in Hungary, 1990-2015

Abstract

Purpose of the article is to provide a wide-range overview of the Hungarian housing market development since the political change in 1989. The time period monitored has brought ups-and-downs in the construction industry due to different reasons which are all worth to examine. Research is based on database of the Hungarian Central Statistical Office and EUROSTAT, and interviews with housing market professionals. The article collects influencings factors of the housing market: macro-economic indicators and influence of economic crisis in 2008, performance of the construction industry, changes in housing policy during the time period researched, status of Hungarian credit market which has the speciality of high rate of foreign currency loans. It is important to analyse why new housing construction suffered its historical bottom in 2013 or the reason behind why credits are used mainly for renovation and not for new built. Interesting point of view provides contrasting Hungarian dwelling types, tenure status, housing quality and affordability with the ones in EU and results lead to important conclusions. As construction industry provides important ratio of Hungary's GDP, it is crucial to revivify it. Data shows that especially residential market lacks projects. New regulations which came into force beginning of 2016 are expected to help housing market and construction industry. Although results of these will be reflected in statistics only after a while professionals estimate that housing market will warm up already in 2016 and will bring new projects latest by 2017. Regulations change too often in Hungary thus quick reaction of population is expected not to miss this support. Despite hurry design and construction hopefully thorough job will be done so that houses will be built for long-term in high quality and with good real value. Unfortunately, goals of new regulations do not show commitment regarding environmental awareness or sustainability. First version of the law included that new houses and flats which are built with help of state support must achieve high level in energy efficiency but this condition evaporated in a short time.