Hungarian superbond reason for decline in real estate market

According to Bloomberg, an initiative by Hungary’s government dubbed the “superbond,” is taking the edge off the world’s hottest property market. Officially called MAP+ the state-backed debt instrument was rolled out to trim reliance on foreign creditors who’ve exacerbated past crises by fleeing at the first sign of economic strife and pays out an average of almost 5% a year.

Since its launch last June uptake in MAP+ — which is sold exclusively to households and is exempt from tax — has been strong: the equivalent of $10.5 billion has been invested.

That diverted cash from real estate at a time when prices on Budapest’s residential market were — according to Knight Frank — surging more than anywhere else on the planet.

1. According to Károly Benedikt, MAP+ has had a significant impact on the housing market because there was simply no alternative to real-estate investment before MAP+.”

And it’s not just the “superbond” at work, according to Duna House’s Benedikt, who points to a slower-than-expected uptake of state subsidies and predicts the market will stagnate in 2020.