Market Report – Investment properties 2017

The Hungarian economy grew at a fast pace, by 4.2%, in 2017 (GDP growth at the middle of the year was 3.7%). The country’s economic performance is middle ranking among central European countries, which is higher than the EU average (2.4%). Investments showed growth (16.7%) again following the setback last year. Building industry’s activity grew significantly, by 30%, in comparison with last year. Strengthening building activity resulted in higher prices: the price index of the building industry was 8.4% for buildings in 2017 (in 2016 this figure was 4.3%)

The volume of residential property buildings grew by one fifth compared to last year, in Budapest the number of completed flats grew more significantly, by 56%. The volume of flat handovers is expected to continue to increase in 2018, on the other hand it can be seen that the number of new developments decreased as a result of the approaching deadline of the new, reduced VAT rate for purchasing new flats, which is to be introduced in the near future.

The expansion of retail trade turnover was similar to last year (4.9%), the growing trend is expected to continue in 2018 due to the increase of net income. Consumer prices grew by 2.4% in 2017.

Rate of unemployment dropped to 4.2% in 2017, which is one percentage lower that the figure in the previous year. Employment rate grew by 1.6% to 68.2% compared to last year. Shortage of labour can be seen in more fields (e.g.: construction industry, production industries), in addition, the rate of unemployment shows significant differences regionally. Base rate has not changed since the middle of 2016 (0.9%).

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