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2017Q2 – Housing market speeding up further

In the first half of 2017 the house prices continued to grow in all regions of Hungary, with Central Hungary leading in the rise.

Summary

As a member of Takarék Group, FHB Mortgage Bank is processing the trend of housing prices in Hungary with a unique detail. Based on the latest data, the increase of housing prices continued to grow. In Q2 2017 the index value of FHB House Price Index rose from 242.43 to 249.30, indicating a 2.9 percent nominal increase in prices compared to Q1. The index value of the house prices on the domestic market have been continuously increasing since Q2 2014; with almost 62 percent nominal and almost 59 percent real increase..

The number of building permits grew significantly in the first three quarters of 2017, indicating a 32 percent rise, compared to the same period in 2016. There are plenty of housing projects in the finish, which developers started with taking advantage of value-added tax reduction. This shows in growth of this year’s annual number of built apartments, as there are nearly 8 thousand flats ready in the first quarter of the year, indicating a 50 percent growth compared to the same period last year.

From the aspect of real estate market, development of housing loans is favourable: the amount of residential loans provided to borrowers has expanded, interest rates decreased further.

In the first half of 2017 the house prices continued to grow in all regions of Hungary. Central Hungary is leading in the rise, as the price increase here is nearly 12 percent, compared to average prices in 2016. Among different settlement types, Budapest is featuring the biggest price rise, but the leeway in chief towns of counties is not significantly behind. Increasingly, it seems that other parts of the country are successfully adding to the competition regarding the rise of housing prices. The least change was featured at municipalities, where prices grew only by 1.6 percent.

Housing constructions are booming, still there is a lot of uncertainty around new housing projects. The shortage of labour force is making the realization of building projects difficult, and this might further escalate with the growth of new orders.

Housing market is speeding up further

In Q2 of 2017 the FHB House Price Index changed from the previous 242.34 to 249.30. Therefore, the price increase continued in domestic house market, and during Q2 2017 one had to pay in average 2.9 percent more than during Q1. In order to generate the current index, besides Takarék Group market information and our own observations, data were sourced from the National Tax and Customs Administration as well, for the indicated period.

At this time, FHB House Price Index level is more than 24 percent higher than the peak level before the crisis. This means, that buyers today need to pay more than a fifth more for the properties than in Q1 2008. However in real terms the prices are still getting about the level recorded at the beginning of 2008 (Figure 1.)

Based on the updated data, we have finalised the value of FHB House Price Index for Q1 2017 as follows:

FHB House Price Index values:

Q1 2016

217.35

Q2 2016

220.23

Q3 2016

226.6

Q4 2016

233.61

Q1 2017

242.34

Q2 2017

249.3


Figure 1. Development of the FHB House Price Index (source:
FHB Index)


Figure 2. Short based changes of House Price Index (Source: FHB Index)

In Hungary, during Q2 2017 the house prices rose by 2.9 percent comparing to Q1 period and the change was nearly as high, in the sense of real value (2.8%). The price increase stays firmly, though somewhat falls behind the rise experienced in previous two quarters of year; we cannot speak about significant difference. (Figure 2.)

At the end of Q2 2017, one had to pay 13 percent more for residential real estate than at the same period 2016, while comparing to Q2 2015, the difference is 32 percent. In the sense of real value, the housing price increase was a bit less: the real estate price appreciation was 11% a year in retrospect 11, while at the two-year horizon it was 29.8 percent. During the elevation curve starting from Q2 2014, the index nominal value rose almost by 62 percent, while real value rose nearly by 59 percent

Közzétéve: 7/31/2018 2:00 PM
A(z) 2017Q2 – Housing market speeding up further az Takarék Ingatlan Zrt. közleménye.

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