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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But the question remains: will prospective homeowners heed Balogh’s advice—or will they treat the programme as a once-in-a-lifetime opportunity and rush to purchase, even at inflated prices? In a country where major economic policy changes can occur overnight, many may opt for swift action, securing a home while the benefit remains available. This could spark a significant rise in prices.

The core aim of the Otthon Start Programme—though not explicitly age-targeted—is to help young people purchase their first home. The government has pledged 25 years of subsidised loans with a fixed 3% interest rate to support this goal.

Otthon Start Programme: Conditions and DetailsKey features of the Otthon Start Programme include:

• Loan amounts up to HUF 50 million (EUR 125,317.85), with terms of up to 25 years.
• Interest rate fixed at 3% for the entire term.
• Maximum eligible property values: HUF 100 million (EUR 250,635.70) for flats, HUF 150 million (EUR 375,953.55) for houses, with a square metre price cap of HUF 1.5 million (EUR 3759.54).
• A minimum 10% deposit is sufficient to qualify.

As a rule, eligible applicants must not have owned residential property in an urban area at the time of application or during the preceding 10 years. However, those who currently or previously owned urban residential property worth no more than HUF 15 million during that period may still qualify.

Applicants may also qualify if they currently or previously held less than a 50% ownership stake in an urban property valued at over HUF 15 million within the past 10 years.

Properties earmarked for demolition, and in some cases properties with usufruct rights, may also be eligible. For married or partnered applicants, only one partner needs to meet the ownership criteria.

The programme is available from the age of 18, with no upper age limit.

There are no marriage or childbearing requirements.

Mandatory criteria include two years of social security contributions, a clean criminal record, no public debt, and an acceptable credit rating as determined by lending banks.

The Otthon Start Programme can be combined with other state-funded home-buying support schemes, such as the “CSOK Plusz.”

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