Characteristics and trends in the land market

Kurucz, Adrienn

Keywords: land market, land prices, investment, crisis, derogation

Although land prices have increased in the recent years, the significant price jump and increased sales activities in the land market, expected to be caused by Hungary’s accession to the EU, did not come to pass. No major turn occurred in rent levels either. Recently, a growing number of people have begun to expect to see stirring in the Hungarian land market due to the expiry of the derogation in 2011 May. Specialists are optimistic, because the end of the derogation could cause the widening of the customer base. One of the greatest problems for Hungarian agro-economy is the lack of capital, which prevents technical and technological improvement or the strengthening of competitiveness and profitability. Opening of the land market is estimated to bring a thousand billion Forint into the sector, could boost innovation and greatly improve the situation of people living off agriculture either directly or indirectly. In my opinion, the key question is not whether foreigners should be allowed to buy agricultural land but the conditions which could effectively prevent the inflow of speculators and could also promote the land acquisition of Hungarian farmers. I do not think that foreigners should be barred from purchasing land; on the other hand, regulations should favour Hungarian farmers. There are several good examples of similar regimes in the West.

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