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New housing scheme could spark a long-unseen price surge in the Hungarian property market
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Experts warn that property prices in Budapest, Debrecen, and other already active regional markets are on the verge of a significant surge, fuelled by a new government housing scheme launching on 1 September. According to analysts, these markets may not be able to withstand another sharp rise in property prices.
New programme could trigger unprecedented demand and price surge
One of the basic principles of economics is that prices rise when demand increases while supply remains unchanged. Experts believe this may soon materialise in the Hungarian housing market, following the government’s announcement of a new home-buying programme.
László Balogh, chief economist at ingatlan.com, estimates that as many as 60,000 to 70,000 buyers could enter the market starting this September, creating immense pressure on the demand side. The “Otthon Start” (Home Start) Programme will allow individuals with no more than a 50% stake in an existing property to access discounted loans with 3% interest—without strict eligibility requirements beyond proof of social security contributions.
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According to Balogh, the new wave of buyers will include those previously priced out of the housing market due to years of relentless price increases, reports Telex. These individuals will suddenly gain access to significant funds, driving up demand—and likely home prices—in a market where the overall housing supply is unlikely to grow meaningfully by September. Following this initial boom, however, demand is expected to decline, similar to the birth rate surge seen in Hungary in the late 2010s, as buyers exhaust their financial resources.
Time to negotiate—or time to buy?
According to Balogh, while the programme will provide a temporary boost to the national housing sector, some cities—such as Budapest and Debrecen—have reached the limits of what they can sustain in terms of further price increases. The only way to curb the market, he says, is if borrowers recognise the importance of negotiating better deals.
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