May 11, 2018 / 8:17 AM / a year ago

Hungary cbank says Budapest housing market must be monitored

BUDAPEST, May 11 (Reuters) - Hungary’s central bank said on Friday that housing prices could grow further in 2018 after substantial rises in the past years, but there was no sign of overheating nationwide.

However, the bank said housing prices in Budapest had already reached levels justified by economic fundamentals.

“As regards house prices, no overheating can be observed for the time being, but due to the high price level in Budapest and the rapid increase in lending, the market must be closely monitored,” the NBH said in its report on the housing market.

“As regards the capital, the completion of new homes may peak in 2018-2019, as residential property developers anticipate the completion of 8,800 and 10,000 new homes this year and next year, respectively, compared to 2,800 in 2017,” it added.

However, in 2020 new home completions will decline sharply as a preferential value added tax rate on new homes will be phased out, the NBH said. (Reporting by Krisztina Than and Gergely Szakacs)

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