Together with Pulzus Kutató, Economx examined the conditions in which people live, i.e. how many people live in their own apartments and rental properties, how much they pay for housing loans and how much they spend on subletting. But, of course, we also asked the respondents about the housing crisis. The results are quite deplorable, meaning that it is not only the Government that feels that all is not well in the housing market.
The “Do you think there is a housing crisis in Hungary today?” 80 percent of the respondents agreed with this question, and only 10 percent think that there is nothing to see here. And the remaining 10 percent cannot answer it, which is not surprising, since we are not talking about a precisely defined concept. In fact, it is a complex issue that is not only an economic issue, but also an emotional state. People usually become aware of this when their own lives become more difficult and the quality of life in their environment is constantly deteriorating.
If we look at the answers according to age groups, we can observe that almost all age groups perceive the housing crisis, while in general the younger age groups find it more difficult to enter the housing market, whether they own or rent a home. Regardless, the younger the respondent, the more they perceive the housing crisis. Thus, 87 percent of respondents aged 18-39, 78 percent of those aged 40-59, and 73 percent of those 60 or older agree that there is a housing crisis. Interestingly, the level of education and the type of settlement, i.e. where we live, are not decisive at all, so almost everyone experiences the housing crisis.
Rental apartments should be built
The question “In which area do you think there is the greatest need for intervention?” the answers to this question show a large standard deviation, which also shows that it is difficult to define the concept of the housing crisis and effective responses to it. The most important measure was identified by the respondents as the “construction of new, affordable rental apartments”, with which 37 percent of the respondents agreed, while 20 percent said that “increasing state housing subsidies” could be the solution. 16 percent of them believe that “improving the regulation of rental apartments” (for example, limiting rental fees) could bring results, 14 percent indicated “support for young people’s first home purchase”, while 4 percent think that “tax concessions for real estate landlords” could reduce fees and so tenants could find an apartment to rent more easily.
More than a third of the respondents would place the emphasis on affordable rental apartments, which are the neuralgic point of the Hungarian housing market, as such almost do not exist. Several civil organizations have been pushing for the development and implementation of the social rental housing concept for decades, but so far there has been no willingness to accept it. Now it seems that the Government has realized 35 years after the regime change, that perhaps this is not an idea far removed from reality, which is a more common phenomenon in the West.
The Housing Capital Program, channeling nearly HUF 200 billion, will hopefully also target the construction of affordable rental apartments on the new housing market, in order to somewhat ease our decades-long backlog. Let’s quickly add that, according to Eurostat data, Hungary has one of the highest percentages of people owning their own property in the European Union, which means that historically, the rental housing market was not the dominant factor even in the previous decades.
What should be done?
For the question “Which of the government measures do you think best helps housing and access to housing” you could choose “Baby waiting”, “Munkáhitel”, “CSOK Plusz”, “housing support”, “home loan to help young people buy their first home at 5 percent with APR”, and from the “channeling retirement savings into the housing market” solutions. The respondents reacted strongly, because according to 51 percent, none of them help to solve the problem! 15 percent thought the “housing subsidy” was good, the “housing loan to help young people buy their first home with 5 percent APR” 7 percent, the “CSOK Pluszt” 6 percent, while the “Babysitting” 4 percent and the “Worker’s Loan” 2 percent.
Since we can face different life situations, everyone is happy with different help and support at their given age. Thus, in fact, a larger proportion of the respondents cannot even support a particular form of support, since according to the social stratification, we can encounter a variety of living conditions and family status.
All in all, when defining the Government’s new housing policy and developing the measures, the difficulty is caused by the fact that it is not possible to stimulate the real estate market and the individual social groups that enter it with the same means. Stimulating supply and demand in certain settlement types, age groups and life situations requires different solutions, while government resources are limited.
At the same time, the price increase is the only common multiple that affects all stakeholders. After last year’s change of around ten percent, experts expect a significant price increase this year as well. At the same time, it is not yet completely clear whether the prices set by the sellers last year, which were raised in the hope of investors coming from the government securities market and private pension savings, or even those earning a “golden visa”, will be followed by a significant increase this year, or whether they have already been priced at that price. .
But what is the housing crisis?
Finally, it’s worth taking a look around to see what the housing crisis is, which we’ve already covered a lot on Economx’s pages. Basically, it means what proportion of our salary we have to spend on rent or interest payments when buying an apartment, and meanwhile how much of our monthly salary is left over for our living, i.e. what standard of living can we provide for ourselves. If the gap between the cost of real estate and the salary opens, that is, we have to spend more and more of our wages on housing, which can also be observed in Hungary, then we are moving towards a housing crisis.
It is certain that in the last ten to fifteen years, housing price growth in Hungary has been among the top in the European Union. This was not a problem in itself, because the salaries were also constantly rising, here it was rather the shocking rate of inflation that caused significant disturbances in recent years. In order to buy an average 50 m2 second-hand apartment in Budapest, in 2009 we needed 85 monthly wages, while in 2023 we needed 96 monthly wages, calculated on the net price, according to the KSH. In the case of newly built ones, we were able to buy a 50 m2 home in the capital for 120 monthly payments in 2009, and 137 in 2023. Nationally, these figures refer to 117 and 132 monthly earnings.
Comparing salaries and house prices, we can basically say that in the last 15 years in Budapest and in all county seats, housing price increases have exceeded the pace of wage increases. But this difference cannot be considered so shockingly marked that we can talk about a sudden housing crisis. If we put the question into perspective, there has always been a housing crisis in Hungary, since in both halves of the 1990s many people lived in sublet, joint tenancy or with their parents, and even before 1945 you could even rent a bed, later students lived in undemanding dormitories, workers’ hostels and workers, compared to that, the rental housing market opened wide after the system change.
It is worthwhile to look at things positively, in which K&H’s assessment of a secure future helps. Based on data from the third quarter, this describes the housing situation of the 30-59 age group. The proportion of self-owned real estate among those surveyed was 71 percent. 77 percent of people in their fifties live in their own residential property, while in the case of people in their forties this is 73 percent, and in the age group of thirty only 64 percent. At the European level, we are quite king, so everything is only a matter of comparison.
Source: www.economx.hu
