Initial estimates suggest Hungary’s newly announced subsidised housing loan program, Otthon Start, could significantly inflate property prices—an alarming prospect for buyers. Those who delay may see their savings dwindle, and for some, the subsidy may eventually become meaningless. Here’s what experts say is the smartest strategy right now and where the biggest price hikes are expected.

Surging demand in Budapest and major cities

Prime Minister Viktor Orbán recently unveiled a brand-new state-backed loan program aimed at helping primarily young, first-time homebuyers. It has since emerged that the eligibility criteria are fairly broad, extending even to those who own up to half or less of a property. This has sparked a sharp increase in demand, according to key market players.

State news agency MTI reports that interest in studio apartments has soared in both the capital and county-level cities, based on 330,000 recent phone inquiries recorded by real estate site ingatlan.com. In Budapest, there’s also been a noticeable uptick in demand for properties between 40 and 80 square meters. Overall demand is up more than 60% across nearly all housing categories. In smaller towns, interest has expanded beyond apartments to include homes with gardens. Similar patterns have been observed by Duna House and zenga.hu, according to a G7 article.

The news outlet Index notes that Otthon Start may be disrupting the usual post-college-admissions trend of increased demand for rental housing near universities. This is particularly visible in Budapest, where the expected rental surge has not materialised, as many parents are now opting to buy instead of rent for their college-bound children.

Analysts see a grim outlook for Hungary’s housing market

Hungary’s real estate supply is so low—meaning few new homes are being built or entering the market—that prices were already poised to rise even without government intervention. According to the Hungarian National Bank, home prices between January and March increased by 15% nationally and 22% in Budapest alone. Otthon Start is expected to accelerate this trend.

The G7 report notes that previous housing subsidies—like the CSOK, Babaváró, and Green Home programs—also triggered major price hikes. Balázs Sándorfi, CEO and founder of Bankmonitor, says property prices in Budapest rose 10–27% within a year of similar announcements in the past.

Sándorfi projects that the new program could result in a 15–20% increase over the next year. Duna House’s chief analyst Péter Szegő estimates a 10–20% nominal price hike, while László Balogh forecasts an increase of 12–18%.

Balogh adds that the steepest increases are likely in lower-cost areas such as Miskolc and Kaposvár. In Budapest, newer developments are already priced out of the program’s HUF 1.5 million per square meter cap, meaning growth will likely occur in outer districts where interest is also intensifying.