Government decision turns Hungarian property sector upside down

Thousands of Hungarian families may sell their small flats and houses in the next few months and buy new, larger ones. That is because the government is to abolish the CSOK family property allocation scheme in the big cities and Budapest in 2024.

According to Pénzcentrum, the purchases will bring a new boom to the shrinking Hungarian property market. Based on the latest analysis of ingatlan.com, families having three or more children will probably sell their properties to buy a larger one before the government’s family real estate buying support scheme expires.

Mostly families with 35-45-year-old parents will sell their small properties by the end of this year to buy a new one. Based on data, 120,000 households are raising at least three children. By the end of 2022, 80,000 of them utilised the CSOK support.

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Price of an additional room varies significantly

László Balogh, the leading economic analyst of ingatlan.com, measures that around 5-6,000 Hungarian families may move to a new flat after selling the old one in the last few months of the year. That may bring a boom to some real estate market segments.

But how much does an extra room of 12 sqm cost now in Hungary? Based on the average sqm price, it costs HUF 11.4 million (EUR 31,000). The most expensive districts are the 1st, 2nd, 5th and 12th, where a sqm may cost HUF 14.5-18 million (EUR 37,000-46,000). Meanwhile, in Csepel (21st district), that is only HUF 8-8.4 million (EUR 21,000-22,000). That is the price for which you can buy a larger flat in Győr, Debrecen and Veszprém. Szeged, Pécs, Kecskemét and Székesfehérvár are cheaper with HUF 7-800,000. An additional room is the cheapest in Miskolc, Békéscsaba and Salgótarján.

Based on the analysts of money.hu, despite the high base interest rate, there are loans for an interest rate of around 7% on the market. Thus, the bargain may be worthy for most families.