New government scheme revives Hungary’s property market: prices will go up soon

The government will introduce a new housing subsidy scheme in 2024, which may revive the frozen Hungarian real estate market. After the COVID pandemic, the Hungarian property sector started to thrive, prices skyrocketed and made it impossible for average Hungarians to buy a flat or house in the cities or Budapest. The trend broke last year, but it seems it will continue from 2024. Experts believe property prices will begin to increase again with at least the average inflation rate.

According to G7.hu, a Hungarian economy-focused news outlet, the government’s CSOK Plus scheme may resurrect the brain dead Hungarian property market. The Orbán administration introduced several measures in the 2010s to help families. Among others, there is a generous tax refund scheme, discounted travelling and entry tickets for families raising children and a financial support system helping families acquire property.

The current system helps families having four or more children the most, but it will fundamentally change in 2024. As a result, the Hungarian real estate market may start to flourish, meaning a significant price increase.

The government introduced such measures to help increase the fertility rate in Hungary. In that regard, they were successful concerning numbers. Between 2011 and 2021 (PM Orbán came to power in 2010), that rate increased from 1.23 to 1.59. The goal is 2.1, but 2022 saw a decrease in that regard, since the rate fell back to 1.52.

The property purchase support system (CSOK) will change in 2024. The new CSOK Plus scheme will offer a discounted HUF 15-50 million loan (EUR 39 thousand – EUR 130 thousand) with a fixed, 3% interest rate. After each kid following the birth of the first child, they will abolish HUF 10 million. That means a family having six children can buy a HUF 50 million flat and pay not even a single forint back. Of course, such families are rare in Hungary. But married couples planning to have at least three babies can take up HUF 60 million (CSOK Plusz and the so-called Babaváró loan) and buy a flat even though they have no saved money. In that case, their fixed instalment will be HUF 283,500 per month (EUR 738), which requires at least HUF 567 thousand (EUR 1477) net income.

Pénzcentrum wrote the most crucial prerequisites in THIS article, we summed them up below:

• 1 child: 15 million, 2 children: 30 million, 3 children: 50 million available loan
• interest rate: fixed 3%
• minus 10 million of the loan you have to pay back after the second kid
• repayment time: 10-25 years
• required cash: 10% provided you have no property and 20% if you do
• the couple has to be married
• the woman cannot be older than 41 years
• the support is available even for foster parents

Property prices will increase again from 2024

In the CSOK Plus scheme, there will be no non-refundable segment. Only those get non-refundable support and discounted loans who buy property in the more than 2 thousand small settlements the government defined last year. You may find a MAP of them HERE.

Those buying a flat or house in Budapest or the cities can only opt for discounted loans after 2024.

Károly Benedikt, leading analyst of the Duna House, said that the measure might result in 10-20 thousand more transactions in the Hungarian real estate sector. Therefore, prices might increase again at least by the average inflation rate.

In 2022 and 2023, 40% of the buyers disappeared from the previously overheated Hungarian real estate market. As a result, based on the property price index of ingatlan.com, in Q3 2023, the average real estate prices decreased in Hungary.