Hungary housing market faces potential price rises amid subsidy changes

The upcoming conclusion of the Otthon Start program (OSP) is expected to drive short-term demand and potential price increases in the Hungarian housing market, particularly for used properties. According to Otthon Centrum, many buyers have utilized the OSP's 3 percent fixed interest rate to purchase existing homes.

The replacement program, Wekerle Plusz, will maintain a 3 percent fixed rate for new builds or construction, but will increase the rate to 5 percent for used properties. This new rate is only 1 to 2 percentage points lower than current market rates. Additionally, the new program narrows eligibility by targeting individuals aged 18 to 41 and excluding those who already own 50 percent of a property, which may impact families with joint ownership.

While the 5 percent VAT on new constructions remains to support the construction industry, long-term demand for used homes may decrease due to these stricter terms. Meanwhile, a government renovation program aimed at energy efficiency could help bridge the price gap between well-maintained and older properties, though its success depends on administrative burdens and energy requirement standards.