The Activity-Start of the latest EBI Construction Activity Report surpassed HUF 830 billion, a value considered to be exceptionally high. It should be added though, that these outstanding numbers were mostly thanks to the start of the construction works of the Mohács Danube Bridge project.
Despite the weaker Q2 and Q3, thanks to the good Q4, in the whole 2024 started construction works totalled about HUF 2800 billion, almost the same level as in 2023. Yet, it was a significant lag compared to the 2021-2022 figures, and at constant price it was still the lowest Activity-Start of recent years. Last time we saw a lower value of construction start than the 2024 level was in 2016.
EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). For purchasing the full report, please write to us.
Multi-unit residential projects boosting building construction
Building construction projects worth a total of around HUF 500 billion were launched between October and December last year. For the whole of 2024, the value of building projects entering construction phase was nearly HUF 2000 billion. Yet, last year’s Activity-Start fell short of the yearly figures for 2021-2023; the difference compared to 2023 was 5.9%, while compared to 2022 and 2021 it was 15% and 13%, respectively. At constant price, the last time a value lower than in 2024 was recorded was in 2015.
The reason for the better Building Construction Activity-Start in Q4 was clearly the multi-unit residential segment that posted a record growth over previous quarters. Activity-Start in the non-residential segment was low in Q4, though, almost the same as in Q3 (just over HUF 200 billion), still a very modest level compared to the quarterly figures of previous years. At constant price, Non-residential Activity-Start has not been as low in the past 11 years as in Q4 2024. Looking at the whole of 2024, construction works started here on slightly more than HUF 1,300 billion at current price, the lowest value since 2021. At constant price, the last time Non-residential Activity-Start was lower than last year was in 2014.
The biggest building construction projects that started in Q1 2024 included many multi-unit residential ones such as several phases of Kincsem by Bayer, the next phases of Park West and City Pearl. Also, the highest-value projects comprised the start of construction of several industrial and logistics buildings (Waberer’s logistics centre in Ecser, Phoenix Pharma logistics warehouse and office in Győr, the production facility of Félegyházi Bakery in Kiskunfélegyháza, Fémalk’s industrial plant in Dunavarsány and Phase 4 of Hankook tire factory in Rácalmás).
Civil engineering posted a good last quarter last year
In Q4 2024 civil engineering works worth more than HUF 330 billion started, approaching the exceptionally high value registered in Q1. Thus, overall, the level of Civil Engineering Activity-Start of EBI Construction Activity Report in 2024 exceeded HUF 800 billion, more than the 2023 figure and nearing the 2021 value. True, almost the entire Q4 Civil Engineering Activity-Start was due to the start of the Mohács Danube Bridge project.
Around half of the Activity-Start in Q4 2024 was related to road and railway projects with their level roughly being the same as in Q1. The situation was similar in case of non-road and non-railway construction works. The weak numbers in the middle of the year were followed by a larger number of construction starts in the last three months of the year. Yet, looking at the whole of 2024, projects worth less than HUF 400 billion entered construction in roads and railways, not even reaching the level recorded in 2023. At constant price, the last time Activity-Start was lower than last year was in 2015.
Most projects started in Central Hungary
Looking at the past 4 quarters, roughly half of the projects started in Central Hungary. Within, nearly 40% of the works started in Budapest. Eastern Hungary had a 23%, while Western Hungary had a 26% share in Activity-Start. Among the regions, thanks to the Mohács Danube Bridge project, the share of Southern Transdanubia spiked (14% after the previous 5%). The share of Northern Great Plain dropped; it was only 9% against the previous double-digit rates.
Multi-unit housing construction has picked up
In Q4 2024 multi-unit housing construction works practically exploded. The value of started works reached nearly HUF 300 billion, almost doubling the previous record of Activity-Start of EBI Construction Activity Report. Thanks to the outstanding last three months, 2024 was ultimately a record year with the value of started multi-unit construction works surpassing HUF 600 billion. It outnumbered the Activity-Start of 2023 by 66% and represented a growth of about 45% at current price over 2021 and 2022. At constant price, the value of multi-unit construction starts in 2024 was higher than in 2023 and 2022, roughly the same as in 2019 and 2021.
The acceleration in multi-unit housing constructions in Q4 2024 comes as no surprise. Developers may have responded to the pick-up in demand already noticeable last year, plus, they may have prepared for an even greater increase in demand this year – in line with market expectations. Subsidies in 2025 (maturing government bonds and interest payments, private pension fund savings that can only be used for housing purposes this year) may considerably spur the willingness to buy a home this year.
As for completions in the multi-unit segment, construction works of about HUF 400 billion were completed in 2024, exceeding the Activity-Completion indicator of EBI Construction Activity Report of the previous three years. Last year’s multi-unit residential completions were the second highest value registered after 2020.
Regionally, most multi-unit residential projects still started in Budapest, accounting for more than 70% of the value of construction starts in 2024, compared to the previous figure of under 60%. However, Eastern and Western Hungary posted a major decrease and had shares of 10% and 18%, respectively.
Weak H2 2024 in the value of started office construction projects
Activity-Start in office constructions fell sharply between July and December last year with works worth less than HUF 20 billion. Although H1 2024 managed to reach the figures of H1 2022 and H1 2023, overall, there was a large drop in 2024. The value of Activity-Start of EBI Construction Activity Report did not reach HUF 130 billion in 2024. This was a 24% decline compared to 2022, while a 68% and 66% lag behind the outstandingly successful years of 2023 and 2021. After 2015, even at current price, only in 2020 did office projects start in a lower value than last year. At constant price, the office market had not registered such a low Activity-Start as in 2024 in the past 11 years.
The start of MBH Bankholding HQ and the central office next to Rossmann warehouse was the two office construction projects with the biggest value last year. The decline in market-based office projects has not started now. Rather, in recent years, state orders have been able to enable growth in the segment. For instance, the fact that the overhaul of the former Ministry of Finance building in the Buda Castle, the historic reconstruction of the Hungarian National Bank HQ and Phases 1-3 of the reconstruction of the former Palace of Archduke Joseph all started at the same time in 2021 boosted Activity-Start that year. Or, in 2023, the start of renovation works on the Ministry of Agriculture building and on the Palace of Justice building, as well as the start of construction of the BudaPart and Zugló City Centre offices all contributed to high Activity-Start that year. A large part of these will also house state agencies and companies.
When it comes to office completions in 2024, the Activity-Completion indicator was nearing HUF 300 billion, the highest value ever measured in the market. For example, the Hungarian National Bank HQ and the reconstruction of the Ministry of Finance building both reached completion. 2025 may be another record-breaking year in terms of office completions as several office buildings in BudaPart and Zugló City Centre may also be completed.
Original article: Tünde Tancsics (ELTINGA); English version: Eszter Falucskai (Buildecon)