Hungary’s big housing push: Cheap loans with 10% down, student hostel plans
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The government’s Home Start programme marks a “big step forward” for young Hungarians seeking to buy their first home, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Thursday.
Home Start programme
Gulyás said the programme, without precedent in recent memory, would launch in September. It will offer first-time home buyers subsidised loans up to 50 million forints (EUR 125,000) with a fixed rate of 3 percent for the full maturity, up to 25 years, he added. Down payments for borrowers will be set at 10 percent, while home prices will be limited to 100 million forints and 1.5 million forints per square metre, excluding any “luxury properties”, he said.
There is no age limit for the credit, and borrowers will not be required to be married or commit to having children, but they must have paid social security contributions in Hungary for at least two years, he added. Gulyás noted that 80 percent of Hungarians over the age of 40 own their own homes, but that rate stands at just 40 percent for people between the ages of 18 and 40. He also noted the “significant appreciation” of properties not only in Budapest but in other Hungarian cities, where “even in the outskirts properties cannot be purchased cheaper than 1 million forints per square metre”.
Gulyás said the Home Start loan could be taken out on top of other forms of family assistance, such as the CSOK scheme. Concerning details of the programme, he said, for example, that a loan of 20 million forints for a term of 25 years would translate into a debt service of a monthly 94,000 forints, while a loan of 30 million forints would involve a 142,000 forint installment a month. The government has discussed details of the programme with the banking association, Gulyás said, adding that Hungarian banks were ready to “sign [loan] contracts in the fastest and simplest way possible”.
Student hostel plans
Meanwhile, Gulyás said that the government was preparing separate programmes in the areas of “first home provision, home refurbishment and housing in general” with special regard to creating a sufficient number of places at student hostels. He said the goal was to provide accommodation at hostels for a total of 17,000 students. Under the Rural Home Refurbishment Programme, people could use 50 percent of their employee benefits received on Szechenyi Card accounts for the purpose.
Referring to a regional comparison, Gulyás said a further appreciation of properties in Budapest could be expected irrespective of the new, subsidised loan programme. He said Budapest prices were “well above” those in Bucharest, but per square metre prices were higher in Warsaw and Bratislava, while the prices in Prague were twice as high as in Budapest.
Meanwhile, Gulyás said Ukraine’s future did not lie in NATO, and rather than offering it membership, the European Union should also strive for a “different kind of relationship” with the country. Gulyás said this year’s NATO summit had been fundamentally different from the previous years’ meetings, with the new US president making it clear that Ukraine’s future did not lie in the alliance.
The “self-destructive proposal” for NATO to bring Ukraine into the alliance as soon as possible was now off the table, Gulyás said, insisting it would have “immediately led to a third world war” as NATO countries would have had to intervene if another member was at war. “Ukraine’s membership is not on NATO’s agenda, and this is unlikely to change for the foreseeable future,” Gulyás said.
The EU summit, however, had been “significantly harder”, because similar changes had not occurred in Europe, Gulyás said. “A similar change in Europe would have required Donald Trump to be elected German chancellor rather than US president,” he added.
Slamming Brussels
He said the prime minister “clearly expressed the Hungarian opinion” at the summit, and Brussels would have to accept the opinion of the 2-plus million people who participated in the Vote 2025 public survey “and don’t want to see Ukraine as an EU member”. “This clear opinion can’t be swept off the table, and sooner or later Brussels will have to admit that this is reality,” he added.
Gulyás said the Hungarian government and Hungary were under severe pressure from both Brussels and Kyiv, adding that there were also national security aspects to this. The government on Wednesday briefed the national security committee on how the Ukrainian secret services had come into contact with Hungarian journalists and media outlets in an effort to “change the opinion of the Hungarian people”.
He noted that with previous enlargements, the EU had guaranteed its own security by admitting countries that were already NATO members. In Ukraine’s case, he said, this meant that because the country could not join NATO, the EU could not get similar security guarantees, either, and the bloc should strive for “a different kind of relationship” with Ukraine.
Gulyás said most EU member states — with the exception of Slovakia and Hungary — were in favour of Ukraine joining the bloc, but Hungary has not approved the opening of the relevant accession chapters. He added, however, that it was inaccurate to say that the prime minister had vetoed the opening of the accession chapters, noting that under the basic treaties certain EU decisions require the unanimous approval of all member states.
Drought in Hungary
Meanwhile, Gulyás acknowledged the challenge posed by drought in Hungary, but noted that the government was ensuring farmers’ access to water for irrigation free of charge. He added that the government set up a Drought Defence Operative Corps in May and earmarked 4.7 billion forints for water management infrastructure. He said 1,000 people were working on topping up reservoirs and getting that water to farmers hit by the drought.
Addressing other recent events, Eszter Vitalyos, the government spokeswoman, said that 45 years after Bertalan Farkas’s mission, Tibor Kapu is on a 14-day mission on the International Space Station where the crew is set to complete nearly 60 scientific experiments for 31 countries. She thanked Orsolya Ferencz, Hungary’s ministerial commissioner for space research, and the staff of Hungary’s HUNOR space programme for their work. She also noted the introduction of the country’s “biggest family support scheme to date” which channels 5 percent of GDP to supporting families
Vitalyos noted the family tax benefit was raised by 50 percent on July 1, adding that another 50 percent increase will be implemented on January 1 next year, with around 1 million families benefitting from the measure. From now on, the monthly tax benefit for families with one child will increase from 10,000 to 15,000 forints, from 40,000 to 60,000 forints for parents with two children and from 99,000 to 150,000 forints for couples raising three children, the spokeswoman said.
From July 1, the csed and gyed family benefits, as well as the allowance for foster parents, will be exempted from the personal income tax. The government has also introduced csed extra, through which young mothers can continue to receive a maternity allowance even if they decide to return to their job 90 days after childbirth, she said.
Gulyás said new mortgage subsidies would not have an impact on this year’s budget, but it would involve an expenditure between 50-100 billion forints in the years 2027-2029. He added, however, that “we don’t know how many people will turn to the facility”. The central budget will provide an interest subsidy between 15-25 million forints for a loan of 50 million taken out for 25 years, he said, adding that “since the state pays the difference in interest rates, the banks will benefit from those transactions.
Gulyás also said the government would pass a decision on a subsidised home refurbishment programme in September the latest. Concerning the heat wave, Gulyás said both this year’s and next year’s budgets allocated 10 billion forints to provide farmers water for irrigation free of charge. He noted, however, that Hungary’s irrigated area had been “significantly larger” in 1989 than now, but the goal was to increase that area. “In this respect the European Union is showing its good side, making resources available for such developments,” he said.
Answering a question concerning last Saturday’s Budapest Pride march, Gulyás said “there may have been fewer people” if the event had not been banned, adding the march had not been on the government session’s agenda. But, he added, “it would be difficult not to call an event Pride if you see creatures called drag queens on stage.” He said the march had given rise to a legal and political debates, adding that the government’s goal to promote child protection “has only partially been met”.