Hungarian housing market soars as savings shift from bonds to real estate

Household savings coming out of retail government securities drove demand on the local housing market in the first quarter, the National Bank of Hungary (NBH) said in a report on Wednesday.

Savings coming out of government securities resulted in close to HUF 300bn channelled into the housing market, Sándor Winkler, a department head at the NBH, said presenting the report. That money was soaked up first of all by the new housing market, he added.

The market was boosted further by a government measure allowing Hungarians to use voluntary pension fund savings for home purchases, although around half of those resources were used to pay off existing mortgages, he said. By the end of March, voluntary pension fund members had asked to take out HUF 38bn of their savings, he added.

Home prices in Hungary rose an average 15pc in Q1 from the same period a year earlier, while prices in the capital climbed 19.2pc. In January-February home loan outlays increased 47pc year-on-year, while the number of contracts signed rose 9pc.

The report shows homes sold for an average 8.3pc over the listing price nationwide in Q1. In the capital, homes went for 18pc over asking price.

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