Hungarian gov't extends Home Start to residential properties in outlying areas

With this measure, the government would boost new construction on newly parceled plots in outlying areas in addition to existing properties, as

tens of thousands of residential properties would become available under the program,

including several hundred new-build family homes currently under construction, and up to a thousand more new family homes could be built in the coming years on building plots subdivided in such residential areas, Miklós Panyi pointed out.

According to the State Secretary, the Home Start program currently covers 98% of residential properties in Hungary. Among properties located in urban and rural areas, farms and estates are eligible for a 3% loan, However, it has not been possible to take out a Home Start loan for residential properties in rural areas that are not classified as farms or estate centers.

According to Miklós Panyi,

• in countryside towns – e.g., Debrecen, Nyíregyháza, and Sopron – significant real estate developments are taking place in many outlying areas, but it may take more than a year for these areas to be classified as internal areas.
• There are thousands of properties in Hungary today that are situated in areas classified as outlying but meet all comfort requirements. The design and construction of several such properties is currently underway in the cities mentioned above.

From the beginning of next year, the Home Start Program will be expanded to include these properties, which will also be eligible for the 3% loan.

Whether banks will actually grant mortgages for properties in outlying areas will be determined not only by the possibilities offered by the legislation, but also by their own internal regulations, which will be influenced primarily by the marketability of the properties concerned. This, of course, requires thorough analysis, which not all banks are likely to devote resources to (see also the village CSOK, which is also only offered by a limited number of banks). In any case, the measure may also stimulate the sale and modernization of outlying properties, which are 30-40% cheaper than urban properties, as some larger banks may see this as a business opportunity.

Cover photo (for illustration purposes only): Getty Images