Boom in Budapest residential property market

Budapest, August 2 (MTI) – More than five thousands new homes came on to the market in Budapest in the first half of this year and some 2,800 homes have been sold already, business daily Világgazdaság said on Tuesday.

Citing OTP Mortgage Bank data, the paper said 7,500 home constructions have been announced as part of 40 investment projects.

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 re-claiming 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.

Source: MTI