Hungary's New Housing Loan Program: Moderate Price Hikes Expected, Especially Outside Budapest

Budapest, Hungary – The Hungarian government's new "Otthon Start" housing program, set to launch in September with a fixed 3% interest rate loan up to 50 million Hungarian Forints, is expected to moderately accelerate house price increases, particularly in smaller towns. Experts from G7 and ingatlan.com suggest that while the program aims to boost homeownership, it could lead to a 15-20% price hike in less expensive areas. According to real estate analysts, the increased demand spurred by the favorable loan conditions will likely translate into higher advertised prices within weeks. However, in Budapest, where property prices are already exceptionally high, a significant price surge is not anticipated in the short term. The capital's average price for used homes stands at 1.3 million HUF per square meter, with new homes averaging 1.6 million HUF per square meter. Minister Gulyás Gergely stated that the 1.5 million HUF per square meter price cap on new properties eligible for the program would help curb excessive price increases. Balogh László, an economic analyst, noted that properties priced above this threshold would not be eligible for the Otthon Start loan, thus limiting demand at the higher end of the market. Former National Bank president Surányi György, however, warned that the government's housing loan program, lacking sufficient brakes, could create a massive budget deficit. He emphasized the need for more targeted support and an expansion of housing supply to ensure the program's sustainability. Investment expert Zsidai Viktor echoed concerns, stating that the program primarily benefits the wealthy, while presenting a significant challenge for younger, lower-income individuals.

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