Residential Housing

There are 824,000 apartments in the capital city, Budapest, 316,000 of which are in desperate need of renovation.

We can distinguish 3 main construction periods in Budapest:

• 1873-1920 - the classical old turn-of-the-century so-called tenement apartments, typical Austro-Hungarian monarchy style
• 1920-1948 - typical 3-storey long houses
• 1948-1989 - the blocks of pre-fab flats of the Communist era

Private ownership of residential properties in Hungary has historically been high. Even during the communist era it was around 65%. The remaining 35% belonged to the state and was rented with a lifetime lease (which could be passed on to co-habitating relatives at the death of the leaseholder) at a price which did not cover the cost of the needed maintenance. Due to the low rental fee and state ownership, maintenance was neglected and most of these homes are in very bad condition. Still, by the end of the privatization in this sector, the share of privately owned residential properties has reached 90-92%. This ratio is the highest in Europe and perhaps the world.

At the beginning of this decade, the government withdrew from home construction and the number of newly built homes dropped from an annual peak in the 1970-80's of 100,000 to 23,000-26,000 per year in the nineties. Today, there is a larger demand for maintenance and new home construction than there is available mortgage financing. Therefore, most new home construction and purchasing is done on a cash basis. Average purchase price/square meter of a new apartment in an upper middle class neighborhood in Budapest is approximately USD 1000. The average rental fee is approximately USD 10/ square meters/month.