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How is the living situation in Hungary compared to German speaking countries in Europe?

Housing conditions in the European Union vary greatly in terms of type, size and quality, and the question of whether to rent or own property.
The following article shows the astonishing differences between real estate in German speaking countries in Europe and real estate in Hungary and provides insights into the opposite development of the german speaking countries compared to Hungary in recent years.

Compared to Germany, Austria and Switzerland (DACH region), Hungary is a classic country for property and home ownership. The development of the housing situation has improved significantly in recent years, as can be seen from the drastically improved indicators such as overcrowded living space or under occupied living space.¹

Based on the statistical material available, it seems as if the Hungarian government has done some things right with regard to housing and family policy and has set clear trends towards better housing conditions in motion by setting appropriate incentives and subsidies.
 

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Own or rent?
 
While in Germany and Austria about half own their property and half rent, in Switzerland the share of ownership is even lower. In Hungary, on the other hand, the ownership rate is 91.3%, one of the highest in the EU. Only in Slovakia and Romania is the ownership percentage higher. Interesting to note, Germany is at the bottom of the EU in terms of ownership.
   
The distribution is to be expected due to Hungary's historically more rural structure, but it also shows the weakness in systematic property formation in the supposedly more developed economies.
 
It is therefore not surprising that the demand from emigrants to rent houses and apartments in Hungary is met with a low supply. Historically, renting is simply not the classic case in Hungary, with the exception of metropolitan areas.
 
House or apartment?
 
A similar picture emerges when it comes to the distribution of the type of housing. While in Switzerland only a good third live in a house and two-thirds in apartments, the rate for houses in Hungary is almost two-thirds compared to apartments in Hungary.
   The values ​​do not add up to 100% because parts for houseboats, caravans, etc. are not listed.
 
Household size and quality of life
 
Statistically, the number of rooms per person, the number of people in the household(hh) and the rate of overcrowded households and under-occupied households are used to determine and describe the quality of life. The fact that the statistics are somewhat lagging is made clear by the fact that the number of rooms makes no statement about the size of the rooms and the quality of the rooms. Although some of these indicators show differences in number, they should also be interpreted with some caution and only develop their meaningfulness in combination with other parameters.
   
   
With the average number of rooms per person as an indicator for the living situation, Germany and Switzerland are ahead of Austria (1.6) and Hungary (1.5) with 1.8 rooms per person. However, the number of persons per household is highest in Hungary with 2.3 persons per household, followed by Austria and Switzerland (2.2) and Germany (2.0).
 
That means more people live in fewer rooms per household in Hungary. This can be attributed both to the different wealth distribution and to family living structures, often with multiple generations.
 
This is supported by the fact that Hungary has the highest rate of people living in overcrowded households compared to Germany, Austria and Switzerland.²
 
Although the rate in Hungary has fallen sharply since 2010 from 47.2% to 19%, which is much higher than in countries such as Romania, Bulgaria or Latvia, where the value is still around 40%, it is still significantly higher compared to the German-speaking countries.
 
In Austria and Germany, the rates have risen slightly: Austria from 12.0 to 14.1%, Germany 7.1 to 10.3%, while in Switzerland the share remained almost constant at just over 6%.
 
If the trend of steadily improving the housing situation in Hungary can be read from one indicator, then it is the proportion of under-occupied households.³ In Hungary it has shot up from 9.1% in 2017 to 24.5% in 2020. In Germany it fell from 36.3% to 35.3% between 2010 and 2020, in Austria from 37.3% to 31.5% and in Switzerland from a high level of 49.1% in 2012 to 43.1%.
 
On the one hand, this may be due to the fact that young families are moving out of existing family structures in connection with house building subsidies, but also to the unbroken trend towards holiday homes on Lake Balaton or in the countryside in order to escape the hustle and bustle of the city. Many of these holiday homes are empty for large parts of the year.
 
Both the drastic reduction in overcrowded living space and the increase in undercrowded living space can be seen as a result of a corresponding family policy including state housing subsidies for young families in Hungary. The opposing development in Germany, Austria and Switzerland in the development of the housing situation, which has deteriorated over the 10-year period, gives cause for thought.

Author: Dr. Peik Langerwisch

After studying business administration with a degree in business administration and a magna cum laude doctorate in management theory, the author worked in global management consultancies and banks for twenty years and has now used his expertise as a real estate agent for real estate in Hungary for several years.

Career and Expertise
 

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¹ Source for the data material in this article is only Eurostat, Housing in Europe, 2021 interactive edition
https://ec.europa.eu/eurostat/cache/digpub/housing/index.html?lang=en
 
² Eurostat definition of overcrowded housing: A person is considered to be living in an overcrowded household if the household does not have a minimum number of rooms equal to:
- a room for the household;
- one room per couple in the household;
- a room for each individual person aged 18 and over;
- one room per couple of same-sex single people between 12 and 17 years old;
- a room for each individual between 12 and 17 years old not included in the previous category;
- one room per couple children under 12 years old.
 
³ Eurostat definition of under-occupied housing: housing that is considered to be too large for the needs of the household living in it, in terms of excess spaces and especially bedrooms. The classic cause of under crowding is older people or couples staying in their homes after their children are grown and have moved out.
- For statistical purposes, a dwelling is considered under occupied if the household residing in it has more than the minimum number of rooms considered reasonable, equal to:
- a room for the household;
- one room per couple in the household;
- a room for each individual person aged 18 and over;
- one room per couple of same-sex single people between 12 and 17 years old;
- a room for each individual between 12 and 17 years old not included in the previous category;
- one room per couple children under 12 years old.