Experts warn: New Hungarian housing loan scheme could push property prices even higher
A state-subsidised credit scheme for first-time home buyers is expected to lift demand and boost transactions, real estate market insiders said on Thursday.
Under the Home Start scheme, announced a day earlier, Hungarians, regardless of age or family status, may apply for 3pc loans up to HUF 50m to buy their first home. The loans are limited to homes under HUF 100m or HUF 1.5m/sqm.
László Balogh, an analyst at listings site ingatlan.com, said the home price threshold could prove a challenge to developers, especially in the capital, where the average price stands at HUF 1.6m/sqm, but could also mitigate the increase in new home prices there. He added that over 92,000 of the more than 137,000 homes listed on ingatlan.com met the price threshold conditions for the Home Start programme.
Duna House analyst Péter Szegő noted that, at present, first-time home buyers accounted for 26pc of home purchases in the capital and 31pc in the rest of the country, indicating the potential for a big pickup.
Construction industry association welcomes Home Start programme
Construction industry association ÉVOSZ said a new government credit scheme to support first-time home buyers could have a positive impact on the sector’s entire value chain in a statement on Thursday.
The Home Start programme, which draws on ÉVOSZ’s analyses and recommendations, will offer first-time home buyers, regardless of age or family situation, 3pc loans up to HUF 50m from September.
EVOSZ pointed to the importance of ensuring the same conditions in the scheme for the purchase of new and resale homes. It also highlighted the need for legitimate businesses to benefit from demand created by the scheme, ensuring increased tax revenue for the budget.
EVOSZ estimates 250,000 homes need to undergo renovation and at least 30,000 homes should be built each year to preserve the composition of housing stock in Hungary.
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