ÉVOSZ: subsidised loans help home renovation

The Hungarian Central Statistical Office's housing construction data did not come as a surprise to the construction industry. Housing construction continued to decline in the first half of 2023, with 19 per cent fewer homes built than a year earlier. The 39 per cent decline in building permits issued and simple notifications for housing construction is the largest decline in the last ten years, according to the Hungarian Central Statistical Office. The 39 per cent decline in building permits issued and the number of simple notifications is the largest decline in the last ten years, according to a statement by the National Association of Construction Contractors (ÉVOSZ).

For the whole of 2023, ÉVOSZ projected 17,000 new dwellings to be brought into use, compared to 20,600 last year. The vast majority of the new housing units built were built in municipalities, encouraged by subsidies for housing construction. The increase in the housing stock was driven by 825 dwellings that were made redundant, in addition to the 7 353 new dwellings brought into use.

The existing housing stock - according to the 2022 Census - was 4.6 million, with a significant share of the housing stock in both the capital and rural areas suffering from technical ageing. And around 80 percent of them no longer meet energy standards.

Housing construction and renovation should be treated as equal

ÉVOSZ encourages renovations to save energy in residential properties, with positive results for both the home renovator, the construction companies and the state, the public budget.

In support of this, ÉVOSZ has carried out calculations, on the basis of which it has developed its proposals for the subsidised loan and the non-repayable aid, the association said in a statement.

For renovations, it is typical that 40 percent of the total cost is accounted for by construction products and materials and 60 percent by live labour, i.e. labour costs. In general, one third of the contract price is returned to the budget (in the form of VAT on raw materials, taxes and contributions on labour).

The ÉVOSZ proposes interest rate subsidies up to a maximum loan of HUF 5 million, with an annual interest rate of 5 percent. In addition, it considers that a grant of HUF 3 million should be available. In the case of machinery renovation, an additional grant of HUF 1 million is considered necessary.