BUDAPEST: Home prices rose by 14 percent on average in Hungary from a year earlier, the biggest increase seen in a European Union member state, according to FHB’s latest home price index analysis.
The average price of a resale home in Budapest, the most expensive area in the country, was 16.3 million forints in the third quarter of 2015 while the average home price in northern Hungary was 5.8 million forints.
In spite of a substantial increase, the number of building permits remains low in Hungary compared to pre-crisis levels. In order to boost home construction, the government has recently cut the VAT rate on construction to 5 percent from 27 percent and expanded home purchase subsidies.
This could have an impact on the number of building permits already this year, the bank group’s analysis said.
