Real estate developers have spoken out about the government's new 3% housing loan

There is enough construction capacity, building materials and commercial services to achieve the construction of 25,000 to 30,000 new homes a year and the renovation of 250,000 existing homes a year, which would be ideal,

stressed László Koji, President of ÉVOSZ, according to the statement.

Drawing on the experiences of buyers and contractors, ÉVOSZ has long maintained that high-value housing construction and home renovation are not feasible without loans where the acceptable interest rate on credit is below 5%.

Significant price increases in recent years have drastically reduced new housing construction and renovation. As the construction industry relies on imported products for 48% of its work, the continued weakening of the Hungarian forint has made construction more expensive (the MNB's annual average mid-market exchange rate was 309.9 HUF/EUR in 2015 and 404.58 HUF/EUR in 2025).

The cost of producing energy-intensive raw materials has increased by an average of 30%. In order to retain skilled workers and engineers, the labour-intensive sector has increased wages by an average of 12% a year. Consequently,

the price per square metre of newly built housing has tripled over the last 10 years.

Household savings are insufficient to finance home ownership for a large proportion of society. In line with the analysis and professional proposals of ÉVOSZ, the government will introduce a scheme enabling individuals to borrow at 3% interest to purchase their first home, regardless of their age, the type of settlement they live in, or whether or not they have children, as announced by the Prime Minister. Importantly, both new and second-hand housing will benefit from this support.

According to ÉVOSZ's calculations, to reasonably preserve Hungary's housing stock, around 250,000 dwellings would need to be renovated each year. Additionally, at least 30,000 new dwellings would need to be constructed annually to maintain the age composition of the housing stock. This technical necessity has been met with a similarly high level of customer demand for decades. There has been no construction or renovation on this scale in the last 10 years, leaving a significant backlog.

Financing issues aside, all the necessary conditions are in place to build and renovate homes in line with strict quality and energy standards, and to meet the evolving requirements of customers and sustainability standards. Over the last two to three years, import exposure has been reduced through the construction of new domestic insulation manufacturing capacity, investments in window and door production, and the development of modern products for cooling and heating purposes and high-quality shading solutions.

Building materials dealer networks help buyers by offering, in addition to their dealerships, customised storage, transport and contractor capacity. Although they face strong competition within the industry, Hungarian-owned retail chains also offer product advice that could be incorporated into government support programmes.

Alongside traditional technical housing solutions, the market has seen the emergence of fast, lightweight prefabricated house builders and prefabricated housing elements for construction and renovation projects. Manufacturers of building elements also offer solutions for constructing tailor-made residential buildings. Designers are thinking in terms of homes that consider climate change and provide favourable long-term living and operating conditions.

"The profession has set out to meet new, high-quality customer demands," emphasised László Koji, President of ÉVOSZ. He stresses that, in the difficult market situation in the construction sector in 2025, housing construction and renovation could provide a breakthrough. The government's stimulus measure will have a positive knock-on effect on the entire construction value chain.

ÉVOSZ has provided the government with economic calculations showing that the 3% interest rate, in addition to interest subsidy expenditure, will significantly increase budget revenue due to additional VAT, contribution and tax payments. However, they emphasise that this will only be achieved if the 'housing' sector is strengthened legally, with no room for profiteers or tax avoiders.

In addition to the creditworthiness check, it is important that the detailed rules include written contracts, loan payments adjusted to technical-financial schedules, cash flow through accounts, compulsory business liability insurance, and a number of other professional conditions. "All this should also serve to ensure a level playing field, the statement said.

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