home purchase subsidies

Proportion of Hungarian youth neither working nor employed falls

The proportion of young Hungarians aged 20-24 neither in employment nor in education or training has fallen about one-sixth in the past ten years, even as the ratio increased for the European Union as a whole, state secretary Bence Rétvári told MTI, citing data compiled by Eurostat on the occasion of International Youth Day.

The ratio in Hungary fell from close to 23 percent in 2013 to 15.4 percent in 2016, Rétvári said. Fewer than half of the EU-28 reduced the proportion of young people neither learning nor employed during the period, he added.

The government’s youth-friendly, future-oriented and predictable policy helps youth realise their potential, become active members of society and start families, he said. About two-thirds of Hungarian youth see their future only in Hungary, which is why “we’re striving to create the most favourable conditions for starting a family”, he added.

More than 50,000 families have taken advantage of some 136 billion forints (EUR 445m) in home purchase subsidies since the government expanded the funding available for the purpose in 2015, he noted.

The human resources ministry has launched a 3.3 billion forint (EUR 10.71m) scheme to support extra curriculum foreign-language classes in Hungarian secondary schools, a ministry official said on July.

Interesting survey by K&H Bank: more than a third of young Hungarians aged between 19 and 29 years have some form of savings, with most young people setting money aside to buy their first home.

Photo: MTI

Hungary’s construction sector output jumps 27 pc in June

Output of Hungary’s construction sector rose by an annual 27.2 percent in June, data released by the Central Statistical Office (KSH) on Thursday show.

KSH noted that the jump came from a low base.

Output of the building segment was up 26.1 percent during the period. Output of the civil engineering segment rose by 29.6 percent.

In a month-on-month comparison, output rose a seasonally and workday-adjusted 1.1 percent.

In January-June, output was up an annual 27.0 percent.

In absolute terms, construction sector output came to 227.6 billion forints in June, at current prices.

Order stock was up 94.5 percent at the end of June from twelve months earlier. Orders rose by 41.0 percent in the building segment and 126.8 percent in the civil engineering segment.

New order volume rose by 39.6 percent, up 26.8 percent in the building segment and rising 47.9 percent in the civil engineering segment. In the civil engineering segment, the increase is due to contracts for road and railway developments, KSH noted.

Commenting on the data, economy ministry deputy state secretary Zoltán Marczinkó told public news channel M1 that the ministry expects the construction sector to add 0.5 percentage points to GDP growth this year. The volume of investments in Q1 this year totalled more than 1,000 billion forints, a 34 percent increase over the same period last year, Marczinko said.

He said the number of home building permits issued had also increased significantly, which he attributed to the reduced VAT rate on home construction and the CSOK housing subsidy programme.

Analyst Gergely Urmossy of Erste Bank said the dynamic growth in the number of new contracts shows that demand will remain substantial the coming months, which should continue to drive output growth in the sector. However, contractors are facing an increasing labour shortage, which already limits growth potential in the industry, he noted. He said construction sector output could grow by up to 20 percent this year.

András Horváth of Takarékbank forecast output growth exceeding 25 percent in 2017.

Photo: MTI

The week in business and finance in Hungary

Daily News Hungary

See below main business and financial news from the previous week:

RICHTER Q2 PROFIT FALLS ON FINANCIAL LOSS

Hungarian drugmaker Gedeon Richter’s second-quarter net income fell by an annual 52 percent to 8.4 billion forints (EUR 27.5m) on a big financial loss, an earnings report showed. Richter’s revenue grew by 17 percent to 114.1 billion forints during the period.

HUNGARY ISSUES RMB 1 BN PANDA BOND

Hungary issued a three-year 1 billion renminbi (EUR 130m) “panda” bond, targeted at the domestic Chinese market, making the country the first to tap both China’s onshore and offshore market for yuan bonds. Economy ministry state secretary Ágnes Hornung said the actual interest Hungary pays on the bond would be under the 4.85 percent coupon after the swap to convert the proceeds into euros.

HOME BUILDING PERMITS CLIMB BY 40 PC IN H1

Home building permits issued in Hungary in the first half jumped by 40 percent to 19,823 from the same period a year earlier, the Central Statistical Office said. The number of completed homes increased by 46 percent to 5,004 during the period.

BOSCH SETS UP HUF 1.6 BN SSC AT POWER TOOLS PLANT IN HUNGARY

German engineering giant Bosch wound up a 1.6 billion forint (EUR 5.2m) project to establish a shared services centre at its power tools plant in Miskolc, in northern Hungary. The government is providing Robert Bosch Power Tools with a 358 million forint grant for the investment which the company promised would create 205 workplaces.

MOL SIGNS EUR 110 M SCHULDSCHEIN AGREEMENT

Hungarian oil and gas company MOL said it signed a 110 million euro Schuldscheindarlehen (SSD) Agreement, becoming the first Hungarian company to avail of the form of credit which is an alternative to syndicated loans and corporate bonds.

DIGI ACQUIRES INVITEL RETAIL, SMALL BUSINESS SUBSCRIBERS IN HUNGARY

Hungarian TV, telecommunications and internet service provider Digi Távközlési agreed to buy the retail and small business clients of local peer Invitel for about 43 billion forints (EUR 141m).

VEHICLE FUEL SALES IN HUNGARY CLIMB MORE THAN 3 PC IN H1

Vehicle fuel sales in Hungary rose by over 3 percent in the first half from the same period a year earlier, data released by the Hungarian Petroleum Association (MASZ) showed. Diesel sales rose by an annual 3.7 percent to almost 1.5 billion litres. Petrol sales were up 3 percent at close to 860 million litres.

HÜBNER INVESTS HUF 3.4 BN IN CAPACITY EXPANSION

German-owned Hübner-H Gumi- es Műanyagipari is investing 3.4 billion forints (EUR 11.1m) to expand production capacity at its rubber and plastic parts plant in Nyíregyháza, in eastern Hungary. The government is providing an 844 million forint grant for the investment which will create 125 workplaces. Read more HERE.

MKB, K+H HOME LOAN PRODUCTS CERTIFIED “CONSUMER-FRIENDLY”

Home loan products offered by MKB Bank and K+H Bank were certified “consumer-friendly” by the National Bank of Hungary. The NBH recently rolled out the consumer-friendly home loan certification to counter high interest margins and a low rate of borrower refinancing. Products offered by Erste, FHB Commercial Bank and 50 members of Hungary’s integrated savings cooperatives have also been certified.

More than 50,000 applications submitted for home purchase subsidies in Hungary

construction

More than 50,000 applications have been submitted for funding under the government’s expanded Home Purchase Subsidy Scheme for Families (CSOK), an official of the Prime Minister’s Cabinet Office said on Friday.

The application amounted to 136 billion forints (EUR 446.2m) in total, state secretary Csaba Dömötör said.

Economy ministry state secretary Ágnes Hornung said that the increasing number of home constructions could lift GDP by 1 percent this year and by 1.5 percent next year.

She said a comprehensive review of the CSOK subsidies is under way, with ongoining talks on how to make funding even more accessible for families and how constructions could continue to boost the economy.

As we wrote yesterday, home building permits issued in Hungary in the first half of 2017 jumped 40 percent to 19,823 from the same period a year earlier.

 

After talks with Hungary, Austria abandons plans to reduce family subsidies for foreign workers

Austrian flag

Budapest, April 5 (MTI) – After talks between Austria and Hungary, the former abandoned plans to reduce child benefits of foreign employees to the level of those in the country of origin if the child lives outside of Austria, the human resources minister told public radio on Wednesday.

Prime Minister Viktor Orbán and Zoltán Balog both “made clear” that they find Austria’s unilateral decision unacceptable, Balog said. As a result, Austria has abandoned its plan which would have disadvantaged Hungarian families, he said.

The Hungarian leaders agreed with their Austrian partners that anyone abuses family beneifts should be punished, but this should not affect honest workers, Balog said.

Meanwhile, on the topic of the Central European University and the amendment to the higher education bill tightening regulations on foreign universities in Hungary, Balog said the previous state of affairs “lacked transparency and fostered privileges”. “Közép-európai Egyetem”, the Hungarian-accredited university, is valuable for the country, he said. CEU’s contributions, however, are unclear, he added, referring to the fact that the university is registered in Hungary but its degrees are accredited in both Hungary and New York, even though it does not have a campus in the US.

40,000 Hungarian families avail of CSOK home purchase subsidies

Budapest (MTI) – Some 40,000 Hungarian families have availed of more than 102 billion forints (EUR 328.7m) in home purchase subsidies since the government launched the CSOK funding platform in the summer of 2015, state secretary Ágnes Hornung said at a conference organised by Portfolio.hu.

This year’s budget allocates 211 billion forints (EUR 680m) for home purchase subsidies, up from 148 billion forints (EUR 477m) last year.

Hornung said proposals on “fine-tuning” the government’s home subsidy scheme, including ones affecting the CSOK platform and VAT, are being drafted.

Hungary’s central bank mulling ways to cheapen mortgages

National Bank of Hungary central bank

Budapest, February 15 (MTI) – Hungary’s central bank will in the future focus on the mortgage market which it sees as sclerotic while its products are too expensive, Márton Nagy, the National Bank of Hungary’s deputy governor, said in an interview to the daily Magyar Hirlap.

In the interview published on Thursday, Nagy said the bank wanted to ensure a fast expansion of mortgages in the next few years.

“Now a fresh mortgage market is being built on forints and its structure must be sound,” he said.

Many banks avoid competitive rates as they guard their profitability, he said, adding there is insufficient price competition on the Hungarian market. And by international comparison, Hungarian banks slap on too many extra charges.

Nagy said there are three issues that can be addressed. First, it is hard for consumers to compare mortgage products. Second, changing banks involves a lot of red tape and expenses. Third, the Hungarian banking system is inefficient compared with its international peers.

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He said banking in the country should be made more efficient and cheaper. Also, lawmakers should adopt new and “healthy” rules in the area of digitalisation, and the NBH is working on preparing a package of regulations for governing its operational framework. Nagy added that central bank experts will be providing responses to the three areas outlined in the next few months.

You can read here the original article in Hungarian. 

Photo: Daily News Hungary

Official: Government spending on family subsidies in 2017 ‘unparalleled’ in Europe

hands family child

Budapest (MTI) – Hungary’s government will spend 4.7 percent of its gross domestic product (GDP) on family subsidies in 2017, a share unparalleled in Europe, human resources state secretary Bence Rétvári said on Wednesday.

Next year’s budget will raise tax breaks for approximately 350,000 two-child families, Rétvári said. Between 2016 and 2019, the monthly tax benefit for families with two children will double to 40,000 forints (EUR 130), he said. Next year, this benefit will be 30,000 forints.

The reduction of VAT rates on milk, eggs and poultry from 27 percent to 5 percent will leave two-child families with an additional 35,000-40,000 forints a year in disposable income on average, he said.

Rétvári said lower earning families will be helped by a 15 percent rise in the minimum wage for unskilled workers, which he said will leave an additional 130,000 forints with families next year. The 25 percent minimum wage increase for skilled workers will raise families’ annual disposable income by around 260,000 forints, he added.

Military personnel and police officers will also see their wages increase further next year, he said. From September, teachers will also receive a pay rise, which will be followed by an increase in the wages of doctors and nurses in November, the state secretary added.

Next year the government will spend an additional 2 billion forints on providing free hot meals for needy children, he said.

With next year’s increased family benefits, Hungary will become by far one of the most generous OECD countries in terms of spending on family subsidies, Rétvári said.

Official: CSOK housing grant applications number 34,500 to date

Budapest, December 27 (MTI) – Altogether 34,500 families have taken advantage of the government’s housing subsidy scheme, the CSOK, since its introduction in July 2015, the state secretary in charge of youth and family affairs at the Human Resources Ministry, said.

Fully 82 percent of applicants approved for a 10 million forint (EUR 32,000) home purchase grant entered the scheme by committing to having a child in future, Katalin Novák told a press conference on Tuesday.

Together with various other home buying subsidies the 2017 budget allocated 211 billion forints for this purpose, with flexibility in the spending cap, she said. This means Hungary will be spending 4.7 percent of its gross domestic product (GDP), nearly a double of the OECD average in spending on family subsidies, Novák added.

CSOK predominantly claimed by families already having children

The majority (70 %) of the families applying for the Family Housing Allowance (CSOK) already have at least one child, the remaining 30 % of the applications are submitted by families that do not yet have any, daily newspaper Népszabadság wrote, citing Ministry of Human Capacities’ data.

According to the ministry, the family housing allowance is claimed after more than three children by 24 % of the applicants, after two by nearly 60 % of them, and after one by only 16 % of them.

In total, 61 000 families have shown interest for the financial assistance in the first half of 2016, and nearly 12 000 application have been submitted for the HUF 10 million (EUR 32 160) subsidy, amounting to a total value of HUF 32 billion (EUR 102.9 million).

Meanwhile, centre-left political party Democratic Coalition (DK) has called the programme an “empty promise”, saying that there are hardly any families that have actually bought a house in the framework of the programme, nol.hu writes.

Reacting to DK’s comment, however, Parliamentary State Secretary Csaba Dömötör said that 63 % of those signed the contract had already received the subsidy.
Furthermore, Dömötör highlighted that, as opposed to positions of the left-wing parties, “79 % of the public support the government’s effort to help families with children”, writes the news site.

edited by Gábor Hajnal

With rules tweaked, demand for home purchase subsidies grows

hands family child

Budapest, April 9 (MTI) – The number of applications for newly introduced home purchase subsidies for families with children has grown since February, when rules on the grants and preferential credit were fine-tuned, lenders told MTI.

MKB Bank said more than 100 clients have applied for the subsidies, mostly for the purchase of resale homes. But it added that, in many cases, clients had to forgo purchasing the homes they wanted because of the marked rise in prices.

The introduction of the subsidies drove prices up early in the year which is likely to lead to a drop in demand and a re-evaluation of pricing by sellers as well as a pickup in demand in the second half of the year, the lender said.

Budapest Bank also said that the number of applications for the subsidies had risen since February and that it was getting several dozen a week now.

UniCredit Bank said it had received more than 200 applications for the subsidies since the beginning of February. About 80 percent of the applications are for resale homes, it added.

Takarékbank said clients had submitted more than 700 applications between January and the end of March, though only 30 applied for a grant and loan package available only to families with three or more children. It also noted strong demand for homes, especially in central Pest County and the northeast of the country.

President sends back home building societies law to parliament for review – UPDATE

Budapest, March 24 (MTI) – President János Áder has sent back a recent law aimed at establishing subsidised home building societies to parliament for a review, his office said on Thursday.

Lawmakers passed the legislation which was submitted by Antal Rogán, the prime minister’s cabinet chief, a week ago.

Under the law, members of home building societies would make regular contributions to the organisation, and also receive a 30 percent match from the central budget up to 25,000 forints a month. After saving enough to make a 20 percent down payment, members would be selected through a bidding process, or based on the size of their contributions, or a lottery, if contributions match, to get an interest-free home loan.

Áder said he supported the concept of expanding opportunities for families to build homes with state subsidy, but for the operation of such schemes a body operating transparently must be created with appropriate oversight.

Bence Tuzson, the state secretary of government communication, said the government would respect Áder’s decision. Simultaneously, he asked parliament to revisit the bill next week and approve the law without delay.

Provisions in the recent law fail to clearly establish the legal status, structural rules and operation of the home building societies, the president said in a letter.

Tuzson added that most of Áder’s concerns could be remedied by way of a government decrees.

He reiterated the government’s goal to enable every Hungarian family to get a home as soon as possible, adding that home building societies would be an instrument for that. In addition to the family home allowance csok and VAT allowances, there should be an opportunity outside the banking sector to accumulate savings coupled with a significant state subsidy of up to 3 million forints in 10 years, Tuzson said, adding that the three different allowances could be combined.

Parliament’s legislative committee will review the law possibly as early as next week, the head of the committee told MTI.

“We respect the president’s opinion and will consider his recommendations,” Gergely Gulyás, a lawmaker for ruling Fidesz, said.

Under house rules legislation returned by the president is to be reviewed by the legislative committee which puts forward an amended legislation for parliament for a vote.

The opposition Socialists said in response that they agreed with the president’s concerns.

The party wants to ensure that the legislation “is not tailored to suit the interests of a particular group of business players,” lawmaker Gergely Barandy, deputy head of the legislative committee, told a press conference.

In reaction to Bárándy’s remarks, the government information office said that the government will stand by its plan to set up building societies, while keeping Áder’s decision in respect. It added that the building societies will enable members to receive four times more state support and interest-free loans than before. The Socialists’ statement shows that the party does not support efforts to help Hungarian families get homes at lower costs and safely, the government information office said.

Photo: MTI

Government publishes final conditions of home purchase subsidies

Budapest, February 11 (MTI) – Hungary’s government published final conditions for recently-launched home purchase subsidies for families in the official gazette Magyar Kozlony on Wednesday.

The conditions are outlined in two decrees: one for the purchase of new homes and the other for resale homes. The decree for new homes grants 600,000 forints (EUR 1,929) to families with a single child for purchases. Families with two children are eligible for 2.6 million forints and families with three children for 10 million forints (EUR 32,100).

There is no limit on the value of the home purchased.

The subsidies are available to spouses, young married couples or couples in civil partnerships with children. Couples that commit to having children are also eligible for the subsidies, as long as they are married and one member is under the age of 40 at the time of application.

Commitments to have children are limited to three for couples with no children, two for couples with one child and one for couples with two children. Couples have four years to fulfill their commitment to have one child, eight to have two children and ten to have three. The commitments may be met with adoption, too, and children from previous relationships of the applicants are also eligible.

The subsidies may be used for the purchase of homes which were completed on or after July 1, 2008 or for which a building permit was issued on or after that date.

Homes purchased with the subsidies must be at least 40sqm in the case of families with a single child, 50sqm for families with two children and 60sqm for families with three children. The thresholds are higher — 70sqm for a single child, 80sqm for two and 90sqm for three — in the case of single-family detached homes.

Families that are awarded the subsidies must live in the homes they purchase for a period of ten years, with certain exceptions. The subsidies are limited to homes built by companies for sale to natural persons; however, the decree allows Hungarians who build their own homes to reclaim VAT on the investment up to 5 million forints. Applications for the VAT refund may be made on invoices issued after January 1, 2015 on a single occasion until the end of 2019. The refunds are available for flats up to 150sqm and detached single-family homes up to 300sqm.

Additionally, the decree establishes a subsidised 3 percent interest subsidy on home loans up to 10 million forints for families with three or more children.

Government’s regular press briefing about Déli train station, home subsidies and education

Budapest, January 21 (MTI) – The government will issue two new decrees on February 3 detailing the regulations of the new home purchase subsidy programme, the government office chief said at a regular press briefing on Thursday. Also the government has asked the development ministry to draft a study on the possibility of demolishing Budapest’s Déli railway station and converting it into a park. The government’s plans to restructure and eliminate more than 70 state-owned institutions and bodies financed from the central budget in a bid to cut red tape, government office chief János Lázár said.  The government is ready to help troubled dairy producers, many of whom may leave the industry due to low milk prices.

Download (8)Government mulls demolishing Déli train station, converting into park

The government has asked the development ministry to draft a study on the possibility of demolishing Budapest’s Déli railway station and converting it into a park, government chief János Lázár said on Thursday.

Commenting on another transport-related subject, he told his regular press briefing that once the state takes over the suburban railways HÉV network, it will be modernised and new lines could be built.

Government to streamline 70 state institutions

Talks will begin between the Prime Minister’s Office and the various ministries within the next few days on how some institutions can be merged into ministries, how outsourcing can be eliminated and the system operated more cheaply and simply, Lázár told his regular weekly press briefing on Thursday. Some 50,000 people are staffed at these institutions, he said.

The government will only make a few exceptions, but the restructuring should apply to all state offices. The bodies that the government will certainly not close down are the police, the military, the tax office NAV and the schools agency Klik. It will also keep intact the State Health Supply Centre and the Social Chief Directorate, he added.

Those most certainly affected include the National Health Insurance Fund OEP and the pension management institute. The government will make its final decisions on February 10, he said.

Government to issue new decrees on home subsidies in February

János Lázár said one of the decrees will rule on the purchase of existing homes while the other will cover subsidies for new-builds.

Lázár said the government will scrap the rule that home-buying loan of 10 million forints (EUR 31,855) is only granted if the real estate costs less than 30 million forints. The government is also prepared to support loft conversions in cities and the construction of new homesteads in the countryside, he said.

Public workers will also be eligible to apply for a subsidy to buy existing homes and for home renovations, Lázár said.

He said the government will hold talks with construction industry players to lay out the guarantees that will enforce the new construction regulations now that the rules for obtaining home-building permits have been loosened.

Museums could contain many objects of contested ownership

Lázár referred to an announcement made on Wednesday that a painting by Pieter Bruegel the Elder could be returned from the Museum of Fine Arts to descendants of the original owners. The minister said that the picture, an object under national protection, cannot be exported from the country, and added that the owners were ready negotiate conditions under which the painting could stay in the museum.

The claim for “The Sermon of Saint John the Baptist”, was submitted by Veronika Batthyany-Strattmann and Adam Batthyany in August last year.

Government ready to help troubled dairy producers

Lázár told a regular government press briefing that the government is looking at ways it can compensate dairy producers for the low prices.

He confirmed that the government will launch a new round of farmland auctions to sell a minimum of 150,000 hectares of land, with prices and legal conditions unchanged. The new round of auctions will be held between March 1-15, with the list of plots being put up for sale to be completed by next week, he said.

Photo: MTI

Home-building scheme guaranteed under Fidesz

home construction

Budapest, January 10 (MTI) – The government’s scheme for subsidising households with children is guaranteed so long as Fidesz remains in power, the ruling party’s spokesman told a conference on Sunday.

János Halász, spokesman for the party’s parliamentary group, insisted that the left-wing parties would abolish the programme if they returned to power.

When the left-wing parties came into power in 2002, they abolished the home-building subsidies introduced by the first Orban government, Halász said, noting that the first Fidesz government, which came into power in 1998, launched a similar scheme to the current one, and this not only boosted home sales but supported renovations too.

Halász noted that the government is considering expanding the programme. Preparations are under way and plans are to expand the scheme in the spring, the politician said.

Answering a question concerning the financing of Budapest’s public transport, Halász said the capital will receive all the support specified by the relevant contracts. Public transport in the agglomeration area is not in jeopardy at all, he said.