Hungarian Government’s New Housing Capital Programme: Building Homes for the Future
Hungary Launches HUF 300 Billion Housing Capital Programme
The National Economy Ministry of Hungary has initiated a Housing Capital Programme in collaboration with the National Capital Holding (NTH) and financed by the Hungarian Development Bank (MFB). The program, which was launched with a budget of HUF 300 billion, exceeded its initial limit by HUF 100 billion due to overwhelming interest, as announced by NTH on Friday.
A tender was announced between March 17 and 24 with the goal of expanding housing supply in the country. The tender attracted applications from twenty-three funds managed by twenty fund managers, with nineteen of them meeting the requirements. Fund managers requested a total of HUF 393 billion, almost double the originally planned HUF 200 billion, leading to the decision to increase the program’s limit.
Domestic fund managers with assets of at least HUF 25 billion in real estate and/or securities funds or private equity funds were eligible to apply. Each fund manager could apply with several funds, receiving a minimum of HUF 5 billion per fund or a maximum of HUF 20 billion per manager, according to NTH.
The allocated funds must be used for domestic real estate investments, particularly in the development of apartments and dormitories. Additionally, 30% of the funds from the Housing Capital Programme must be utilized for projects outside of Budapest.
The investment projects will operate on a market basis, requiring a minimum 30% contribution from private investors with return expectations aligned with market conditions. Fund managers will be monitored by NTH, which reserves the right to impose sanctions for non-compliance. The distribution of the first funds is expected to take place in the second quarter.
NTH CEO, Sándor Buda, stated that the implementation phase will commence later this year, leading to the completion of new residential buildings and dormitories within 2-3 years. The Housing Capital Programme aims to facilitate the construction of 30,000 new properties with an additional development worth HUF 1,000 billion.
This ambitious initiative is set to boost the housing sector in Hungary and provide much-needed support for the development of new properties across the country.
