With GDP growth expected to reach 0.6% in 2024, the government has started to develop a New Economic Policy Action Plan to kick-start 2025 with a “take-off”. Ten of the 21-point plan are directly or indirectly linked to the real estate sector, which accounts for up to 15% of GDP (including construction) . The small weight of the sector raises doubts as to whether the impact of the programme on overall GDP could be sufficient to achieve a proportional share of 3.5% growth.
Of the 10 points relating to the housing market, 6 will have no impact or will have an impact only after 2025. The tightening of Airbnb conditions, the revision of the system of rental fees and contract terms, the limited introduction of the 5% voluntary interest rate cap on home loans and the maintenance of the reduced 5% VAT rate on the sale of new residential property, as well as the no-detail plan for the youth housing programme, will not have a significant impact on house purchase and renovation. The Housing Market Capital Programme, which aims to encourage the expansion of dormitory places, new housing construction and rental housing, will be open for applications from 1 March, which, given the lead time of the application, means that the programme is expected to have a (not very significant) impact from 2026 onwards.
Programme items that will continue to have an impact in 2025 include the previously announced energy modernisation programme, the rural home renovation programme, the SZÉP card and the possibility to use voluntary pension contributions for housing expenses. The energy modernisation programme has a budget of HUF 108 billion, while voluntary pension funds had a budget of HUF 2164 billion as of 30 September 2024. The volume of the rural home renovation programme can be estimated from the amount of support for the 2021-2022 home renovation programme (HUF 620 billion over two years). With a support rate of at most 50% and a similar volume (in a narrower range), the programme could mobilise HUF 620 billion this year. In addition, 50% of the money on SZÉP cards, HUF 210 billion, can be spent on housing.
However, the amounts actually mobilised will be much smaller. The rural home renovation programme provides support under much stricter conditions than before, and the government itself expects only HUF 300 billion from voluntary pension funds , while in the case of the SZÉP card, about a third of the total amount could be spent in the sector, if the proportion of people planning to buy or renovate a home is based on the GKI’s household surveys. The total amount allocated to the sector by the scheme is expected to be around HUF 780 billion in 2025.
Expected impact of housing market programmes this year, HUF billion
|
Program |
Total potential amount | Expected amount |
| Energy Modernisation Programme | 108 | 108 |
| Rural Home Renovation Programme | 620 | 300 |
| Voluntary pension fund assets | 2 164 | 300 |
| 50% of SZÉP Card payment | 210 | 70 |
| Total | 3 102 | 778 |
| Housing and housing renovation market (2024) | 5 030 | |
| Program share of market | 61,6% | 15,5% |
This should be compared with the market for housing purchases and renovations. The number of old and new dwellings sold multiplied by the average price gives the value of the housing market, while the weight in the consumer basket and household consumption expenditure give the amount spent on housing renovation. The sum of the two is the target market of the government programme. In 2024, the total used housing sales amounted to HUF 3,154 billion, new housing sales to HUF 267 billion and residential renovation to HUF 1,612 billion, i.e. a total market targeted by government support of around HUF 5,030 billion.
Change in the share of people surveyed on planning to buy and renovate a dwelling, 2015-2025 (%)
Source: GKI
Although the scheme could provide additional funding of up to 62% of the market in an extreme case, this is unlikely to be achieved. Based on the experience of previous programmes, the real expansion could be 15.5% in nominal terms. Part of this will be absorbed by the price increase generated by the programme itself. If we also take into account that there were housing market interventions last year, the actual increase in 2025 is even smaller.
Expected impact of the programme on the overall housing and housing renovation market
Source: GKI calculations
Overall, the government is trying to kick-start economic growth this year, following the stagnation of recent years. However, some of the decisions taken to this end are either extensions of previous measures or new elements that will have little impact on the real economy. However, even programmes that raise visible sums of money only account for a little more than a tenth of the target market. In addition, the impact on the overall economy is reduced by the additional price increases triggered by the scheme and the fact that the money spent on the SZÉP card is ultimately simply reallocated from tourism expenditure by households, resulting in a loss of revenue for tourism. Thus, the GDP stimulus from housing programmes will be modest, while the increase in real estate prices will be larger.
