Land valuation and land rents in Hungary

State and cooperative agricultural land had neither a market nor an assigned accounting value in the former socialist countries. This led to tremendous waste and underusage. For this reason, in the reform movements of the 1960s and 1980s a monetary valuation of land was demanded by some economists and several methods were worked out to determine this. After the political transition, private land ownership was reinstated. In Hungary, land was redistributed partly free and partly sold inexpensively in exchange for compensation bonds given for confiscated properties. The large number of owners not cultivating the land has created a plentiful supply. Owing to this, and to low agricultural incomes, rents are low. Selling prices of land are also low. These are determined by the low rents and the many would-be sellers who cannot sell their properties owing to the scarce demand for them. Since the demand for renting is higher than for buying and selling is controlled, rents are higher relative to prices than in countries where a free land market prevails.