Last year the decrease came to a halt ….

paloczevaIn 2014 the 10-year-long decrease in housing numbers came to a halt. The data indicate that housing numbers reached their low in 2013 with a mere 7,293 newly built and first use flats. The 2014 data were more promising with an annual number of more than 1,000. (8,358 new flats.)

This improving trend is not only based on statistics and the increasing number of building permits, but on fresh market news and reports as well. The market of used flats is invigorating, and real estate prices are also on the rise, which is typically an important indicator of building activities.

flats_2015_febrHowever, as the figure shows there is room for further improvement. The number of new flats in 2014 is still less than 20 pct of its number in 2004, when housing was at its peak. It is true that the number of newly built houses (around 40 000) after the first few years of 2000 resulted in an artificially inflated real estate market. Plus, the substantial wage increases in 2002 had a positive (but unsubstantiated) effect on the population’s income expectations, and the rapid spread of the foreign currency loans led to a unsustainable real estate processes and financial tensions. The falling number of housing can partly be explained as a reaction to these phenomena.

But the extremely low new housing trends in the last two years represent the other extreme of the pendulum. While in the whole country barely more than 8 thousand flats were built, in certain counties the number of first use flats were extremely low: In Nógrád county only 34 (!), while in Tolna county only 100.

As long as the exchanging of the foreign currency debts into HUF is completed, and the interest rates of real estate HUF debts – parallel to the general decrease of the interest rates – continue to fall, there is a chance to reach a number of 10 000 of new flats this year.