Hungarian government launches Housing Capital Programme to build new homes

The Housing Capital Programme initiated by the National Economy Ministry, coordinated by the National Capital Holding (NTH) and financed by the Hungarian Development Bank (MFB) is launched with a HUF 300bn limit, HUF 100bn more than planned, due the high level of interest, NTH said on Friday.

The tender announced between March 17 and 24 with the aim to expand housing supply attracted applications from twenty-three funds of twenty fund managers, of which nineteen complied with the requirements. The fund managers requested funds of HUF 393bn, close to double the originally announced HUF 200bn, that is why a decision was taken to increase the tender limit.

Domestic fund managers that managed assets of at least HUF 25bn in real estate and/or securities funds or managed private equity funds with an average total registered capital of at least HUF 25bn by the end of 2024 were eligible to apply. One fund manager could apply with several funds so they could receive at least HUF 5bn per fund or a maximum of HUF 20bn per fund manager, NTH said.

The real estate must spend 100pc of the capital awarded on domestic real estate investments, primarily the development of apartments and dormitories, and 30pc of the funds from the Housing Capital Programme must be spent on projects outside of Budapest.

The investment projects will be implemented on a market basis, that is with a minimum of 30pc private investor contribution, with return expectations in line with market conditions. The funds will have to report to the NTH, which may impose sanctions in the event of non-timely or inadequate performance. The first funds are expected to be allocated in the second quarter.

NTH CEO Sándor Buda said the implementation phase will begin later this year and new residential buildings and dormitories will be completed in 2-3 years. The Housing Capital Programme is expected to help construction of 30,000 new properties with an additional HUF 1,000bn of development.

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