The new state-subsidized housing scheme starting next year, called CSOK Plus, could change the trends in the real estate market, according to a joint analysis by ingatlan.com and money.hu. The scheme is expected to boost demand in the market for new residential properties, with a maximum value of 80 million Hungarian forints, especially for first-time homebuyers.
Ingatlan.com’s analysis highlights a key difference compared to the current programme. Unlike the existing conditions, CSOK Plus does not distinguish between new and used residential properties. New homes are generally more expensive, which means that the same amount of money will buy a smaller property. However, the good news for buyers is that 80 million forints might be sufficient for purchasing a multi-room new apartment or house. On the other hand, new constructions are often more energy-efficient and have more modern layouts compared to properties that are several decades old. As a result, new constructions are expected to hold their value better in the future, as pointed out by László Balogh, the Chief Economic Expert of ingatlan.com.
Levente Korponai, the leader of money.hu, emphasized that the CSOK Plus, which can be applied for by families with two or more children, offers a substantial amount (between 30 and 50 million forints) that can greatly contribute to the purchase of a new home, especially when combined with other family support programs. However, it’s essential to remember that both the CSOK Plus and the childbearing support are essentially loans, so creditworthiness is a fundamental criterion for eligibility, and it requires an adequate income.
In Budapest, based on average square metre prices, this amount can be sufficient for a 62-square-metre new apartment. The highest supply of new residential properties can be found in the VIII, XIII, and XIV districts, with more than 900 new properties available. With an 80 million forint limit, this could translate into a 58–64 square metre apartment.
In Pest County, an average 92-square-metre new house can be obtained for 80 million forints, especially in places like Érd, Diósd, Kerepes, and Göd, where you can expect 83–110 square meters of living space.
Analyzing the property markets in county seats, in most major cities, you can anticipate houses exceeding 100 square metres in size, with some variations. In Győr, for example, a 90-square-metre apartment or a similar-sized new house can be accommodated within an 80 million forint budget. In Debrecen, you can consider a 78-square-metre apartment or a 130-square-metre house. Meanwhile, in Kecskemét, it is possible to get a house of over 127 square metres, and in Nyíregyháza, even a house exceeding 140 square metres could be an option for those applying for CSOK Plus.
The analysis by Duna House emphasizes that from 2024, the CSOK Plus will provide favourable conditions for families looking to establish themselves, or for couples planning to have additional children. The appearance of CSOK Plus is expected to result in significant monthly savings on loan instalments, leading to lower monthly expenses for families. Furthermore, clients can expect debt forgiveness as part of the new scheme. Specifically, after the birth of the second (and each subsequent) child, ten million forints of the outstanding debt will be forgiven, which will further benefit the family’s finances. Over the long term, the amount saved on monthly payments can potentially be invested in further housing-related savings, making use of the options provided by housing savings funds, as maintaining one’s property is essential, according to experts from Credipass.
Krisztián Fülöp, the leader of Credipass in Hungary, stated in the press release that in 2023, a single-child CSOK does not come with subsidized interest rates. In this case, a 15 million forint market-rate mortgage with a 25-year term at 7.45 per cent interest would result in a monthly instalment of 110,361 forints. However, in 2024, with the CSOK Plus support and no additional market supplementation, the instalment would be around 71,000 forints. This nearly 40,000 forint difference that families can save next year is worth investing in an 8-year housing savings fund. Following this example, more than one million forints in bonuses can be added to personal contributions, resulting in total savings of around five million forints by the end of the savings period. This could provide the necessary equity for purchasing a smaller home or a rural house.