The amount of unused properties for sale has increased to more than twice between February and May 2016 – however, only a select few can move into their new homes, as the number of flats that are able to acquire an occupancy permit in 2016 is limited. The first bigger wave of moves on the market will happen in the second half of 2017. The still scarce amount of supply and the much greater demands amped the prices even higher and further, while in increase of unit prices surpassed 5% - as included in the analysis of the Budapest Housing Market Report.
According to the new database of the Budapest Housing Market Report, May saw twice and a half as much housing for sale compared to the numbers of February. The growing supplies grant growing and increasing prices, as the average price of housing available increased by nearly a million HUF during the examined timespan, thus nearing a total average of 40 million. As far as prices per m2 are concerned, the rise was even proportionally greater: the unit prices of new housing for sale have risen by 5%.
Parallel to the growing number of housing for sale it’s also apparent that estates pertaining to projects that have already been on the market are selling out quickly as well. As a consequence, most projects that still have free housing available are currently undergoing realignments.
In the last couple of months, several developers have announced projects with a large number of housing involved, with moving dates in 2017-2018. However, the number of building permits issued are lagging behind the growing number of housing offered for sale, which is probably due to the fact that various developers begin the selling process early on, even from the drawing board – before they acquire the necessary permits, exploiting the current wave of demand.
When exactly will flats appear on the market en masse?
Due to the current favourable environment in the housing market, which includes tax reductions and the new home allowance program, many developers decided to start new projects. This reaction is further mirrored in the scheduling of inauguration dates, besides the growing numbers of housing available. The now theoretical projects need more time to be planned and constructed. In 2016, only a limited number of new housing will be completed: these developments had to be started before the announcement of the aforementioned beneficial measures. The projects that have been initiated as a result of changes on the market can only acquire the respective occupancy permits with a certain delay, which is demonstrated by the prognosis that a bigger number of newly constructed housing can appear on the market in the second half of 2017. More than 1400 flats can be completed in the third and fourth quarters of next year.
It is typical of developers that they put their projects on the market as early as the planning and designing stages – in concordance, the completion of more than 700 flats has already been announced for the first three quarters of 2018. Evidently, the amount of inaugurations and completed projects planned for that year will be certainly growing because of more and more investments and developments that are yet to be announced. The active state of the housing market is also demonstrated by the fact that almost 200 flats in Budapest have been introduced to the market with no provisional completion dates whatsoever, which means that these have been put up for sale at a very early stage.
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