A lifetime of savings? Buying a home in Hungary became more challenging
Purchasing a 60-square-metre home in Hungary now demands countless years of dedicated savings for a couple on average wages. Here’s what is behind the insane price hike and what experts suggest to tackle the unfolding housing crisis in Hungary.
Significant price hikes
Pénzcentrum writes that over recent decades, housing subsidies, including Hungary’s CSOK and Baby loan (Babaváró hitel) schemes, have fuelled significant price hikes, making it increasingly challenging for average earners to afford a home in Hungary. While housing prices were relatively stable around 2010, the cost of new homes in Budapest has since surged by 3.6 times, with property prices more than tripling. National trends were similar, though property prices rose at a slightly slower rate. Experts suggest that renovating and reusing vacant properties could be a more cost-effective solution to Hungary’s housing crisis, offering potential relief for those struggling to secure home ownership.
Shocking numbers
From 2010 to 2014, housing prices per square metre in Budapest and nationwide remained stable. However, the introduction of the CSOK subsidy in 2015 and the Baby loan in 2019 spurred a surge in demand for property, driving prices sharply upward. According to GKI analysis, this escalation means an average earner in Hungary would need 69 months of income to buy a 60-square-metre resale apartment and 155 months for a new one. In Budapest, these figures soar to 140 and 200 months, respectively, underscoring the affordability challenges of securing a home in Hungary.
For a couple on average wages, purchasing a home in Hungary is a lengthy endeavour. Saving 20% of their income, they would need over 14 years to buy an average pre-owned home, while a new home would take 32 years. In Budapest, the timeframe extends to 29 years for properties and 41 years for new ones, highlighting the affordability issues for many Hungarians, especially younger buyers with below-average earnings.
A possible solution?
The time required to purchase a home in Hungary has remained relatively stable for resale properties nationally since 2015, but it has surged for new builds and Budapest homes. Meanwhile, the housing crisis is intensified by a substantial number of vacant properties: 572,000 homes (12.5% of the national housing stock) are empty nationwide, with 160,000 (28%) in Budapest alone. Many of these homes are in decent condition, yet remain unused. Renovating these vacant properties could offer a cost-effective solution to ease housing pressures, supporting more affordable home ownership options and boosting economic growth by leveraging existing infrastructure.
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