Realista.hu: New residential property boom may lure Hungarians working abroad back home
Now is the time to work in construction! Orders in the building industry are experiencing continuous growth and construction capacity is struggling to keep up with demand. As a result, both contractor rates and wages are rising on a monthly basis.
“Production volume for the construction industry for March 2017 is 33% higher than a year ago, while it is up by 24.7% on last year’s low base for the first quarter of the year. By the end of March, the volume of building contracts for construction companies was up 50.2%,” reported Tibor Földi, CEO of Cordia Zrt, a Futureal Group company, commenting on the construction industry data published on Thursday by the CSO (the Hungarian Central Statistics Office).
Cordia’s experiences show consistently growing demand from buyers. This has in turn resulted in a rise in orders for the construction industry, with the capacity of contractors unable to keep pace. On one hand, this restricted capacity hinders the growth potential of the construction industry as a whole. On the other, it has resulted in monthly increases in contractor rates in keeping with the laws of supply and demand, and notable increases in the wages of workers. “This rise, which is also affected by the increase in the minimum wage, could slowly lead to a situation where Hungarian workers currently employed in the construction industry in Western Europe start returning home,” argued Tibor Földi.
The property expert also believes that recent CSO statistics for residential real estate construction in the first quarter confirm the legitimacy and usefulness of home-building initiatives. “We hope that these data and trends will help convince the government to keep the reduced 5% rate of VAT, which has played a key role in the growth in the market, beyond 2019,” said the Cordia CEO. He also added that “a permanent 5% VAT rate would also alleviate the problem of lack of capacity in the sector, as constructors would not need to rush to finish their developments by the end of 2019.”