It is yet to be seen how the Government Support Family Benefit (CSOK) will affect the construction and real estate markets on the long run – the former is still partly in hibernation after the years of the crisis, and by the time it catches up to demand, that demand may disappear.
The first impact assessment about the effects of the CSOK has recently been published by the Fiscal Responsibility Institute Budapest (FRIB), and while it is a pretty static analysis (not accounting for movements of the national bank, the private sector or the capital market – it has some very interesting conclusions.
The main statement of the assessment is that the new allowance may greatly increase demand on the market it could very well lead to a bubble on the long run as the constructions market will need several years to catch up that demand.
The main problem is that there are very few professionals left in the country, a lot of them sought work in Western European countries and they are reluctant to come back to Hungary for a possibly lower salary than their current ones. And it would take several years to educate new professionals.
According to census data and analysis up to 150 thousand speculative investors can enter the market thanks of the CSOK, but when they disappear there will be a great vacuum left behind.
Another effect could be that newly built homes are going to be more expensive – the price increase can reach 10%.
Overall the analysis concludes that the CSOK will increase the GDP, create new jobs and improve the position of families looking to buy their own homes, but all effects will be short-lived.
(Source: http://hvg.hu/gazdasag/20160125_Jo_nagy_ingatlanlufit_hozhat_a_csok)
