Part I — Situation overview

On 19 October in Parliament, Prime Minister Péter Magyar announced that the fixed 3 per cent Otthon Start Programme, which has so far reached some 70,000 loan contracts, will be replaced by Wekerle Plusz. For buying and building new homes the interest rate stays at a maximum of 3 per cent, while for second-hand homes it may rise to 5 per cent. Current market mortgage rates are 6–7 per cent. It will be a ground for exclusion if the applicant or their spouse already owns at least a 50 per cent share in a home. There will be a five-year residence obligation and, according to the press, an age limit of 41 as well (Portfolio, Magyar Nemzet). The change does not affect Otthon Start contracts already concluded, and the conditions of CSOK Plusz, the rural CSOK and the baby expecting loan do not change. What is not known, however, is from when the new rules apply, and whether the cut-off date refers to the submission of the loan application or to the signing of the contract. Portfolio considers 1 January 2027 the most likely date, but this has not been stated officially. In the same week, the Government initiated an indefinite extension of the 5 per cent VAT on new homes (the amendment to the law on the VAT rate is adopted by Parliament). And Dávid Vitézy, Minister of Transport and Investment, announced that the Budapest Diákváros (Student City) project will restart with EU funding.

On the supply side the backlog goes back decades. According to data cited by Telex, the number of municipal rental flats fell from 176,501 to 98,635 between 2000 and 2025, and the number let on a social basis from 59,000 to 33,500 between 2016 and 2025. According to the outlet, a fifth of the flats of Budapest’s district municipalities, 7,691 flats, stood empty, and in 2022, 2,600 flats were registered as uninhabitable. Mayor Gergely Karácsony asked the districts for project proposals by the end of October for social rental flats to be renovated and expanded with EU funding. In 2027 the government will spend 30 billion forints on affordable rental housing and student hostel places.

On 7 September (Four housing instruments at once) MIAK called for an impact assessment of the sequence of housing instruments, and on 31 August for an inventory of returned state assets for rental housing purposes. It wrote about the targets of Diákváros on 5 October. The direction of the present step — narrowing demand-side support and expanding supply — is in line with these proposals. In MIAK’s reading, the more targeted loan programme is justified, but the uncertainty between the announcement and the detailed rules is now itself producing a market effect. And the supply-side turn will deliver quick results if it starts with the flats that already exist and stand empty.

Part II — Grounding in the literature

Three sources provide a frame for assessing the switch. According to the box on housing affordability in the European Commission’s 2025 euro area report, house prices are shaped at the same time by demography, monetary policy, land-use and building regulation, rental rules and the social rental housing stock. The report therefore calls for several instruments to be applied together, and warns against measures with adverse side effects. The European Commission’s European Pillar of Social Rights Action Plan (2021) describes access to affordable housing as a growing EU problem. Alongside the rise in homelessness and energy poverty, the plan also announced an EU initiative targeting 100 renovation districts. The World Bank’s World Development Report 2015 describes loss aversion. People feel a loss more strongly than a gain of the same size, so the prospect of losing a benefit prompts them to act more strongly than the promise of a new benefit. The detailed treatment of the literature — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable steps. The first removes the uncertainty of the transition, the second makes the impact of the narrowed programme measurable, and the third starts the supply-side turn with the flats that can be put to use the fastest.

3.1 Fixing the transitional rule: a cut-off date for submitting the complete loan application (within two weeks, by 7 November 2026 at the latest; the full set of rules at least 30 days before the launch)

According to Portfolio, because of the uncertain cut-off date, brought-forward loan demand of up to 100 billion forints may appear at the end of the year. If 31 December 2026 is the final day for submitting applications, according to an expert asked by the outlet, November and December could bring 50 billion forints of additional loan volume. If, however, the date of signing the contract counts, those wishing to buy a second-hand home at a 3 per cent rate practically have to complete the sale by the first half of November. A credit expert quoted by Magyar Nemzet warned that a favourable interest rate alone does not make a property a good buy. The loss aversion described by the World Bank (see 6.4.3) explains exactly this situation: people feel the loss of the 3 per cent rate more strongly than what they would gain from a well-considered purchase. MIAK proposes that the Government fix and publish the transitional rule within two weeks, by 7 November 2026 at the latest. The cut-off date should refer to the submission of the complete loan application, not to the signing of the contract. In this way the risk of the banks’ processing time does not fall on the buyer, and does not force a hurried sale. The full set of rules of Wekerle Plusz — interest subsidy, caps on price per square metre and purchase price, the range of co-debtors, letting during the residence period — should be published at least 30 days before the launch. Banks and buyers need to be able to prepare. The proposal is an implementation condition of the DM7 housing access programme point.

3.2 Quarterly take-up statistics and a review point (first publication by 30 April 2027, review of the interest rate difference after 12 months)

According to estimates by banks asked by Portfolio, 35–50 per cent of borrowers so far may be excluded by the tightening: those over 41, those who already own a home and those buying for investment. According to the outlet, banks do not collect data either on what existing home ownership Otthon Start applicants had. Magyar Nemzet highlighted the losers of the tightening, the higher interest rate and the exclusion conditions. Portfolio also pointed out that the more favourable rate for new homes benefits higher earners, because according to the Hungarian Central Statistical Office (KSH), the average price per square metre of new homes is more than twice that of second-hand ones. The narrowing of eligibility therefore works in two directions at once, and neither effect can be measured today. The euro area report (see 6.4.1) calls precisely for measures with adverse side effects to be avoided. MIAK proposes that the Hungarian State Treasury, which accounts for the interest subsidy, publish the take-up of Wekerle Plusz every quarter, without names, on the basis of data supplied by the banks. The breakdown: age, income decile, county, settlement type, new or second-hand home, and the average loan amount and purchase price. The first publication should appear by 30 April 2027. After 12 months of operation, the Government should assess the difference between the 3 and 5 per cent rates and the age limit of 41 in a public review. If the data show that the second-hand housing market is unjustifiably disadvantaged, or that the age limit excludes families with children in large numbers, the conditions must be adjusted. The proposal is an application of the SZ3 housing data platform and the EP2 housing construction data platform programme points.

3.3 Empty flats first: a national municipal rental housing inventory and renovation priority (the inventory by 31 March 2027, the project selection criterion with the first Wekerle rental housing call)

On the supply side, the fastest and typically cheapest new home is the one that already exists but stands empty or is uninhabitable. According to data cited by Telex, a fifth of district municipal flats in Budapest stood empty, and the number of renovated municipal flats has not grown substantially in 25 years. The Action Plan of the Pillar of Social Rights (see 6.4.2) also approaches affordable housing from the angle of renovation districts. MIAK proposes two steps. First: by 31 March 2027 the Government should prepare a national, public, settlement-by-settlement inventory of municipal rental flats. It should show how many flats are let, how many stand empty, how many are uninhabitable, and at what estimated cost they can be renovated. Supplying the data is the task of the local governments; the Government should provide a uniform data sheet and funding for this. Second: in the rental housing calls of the Wekerle programme and in the projects financed from EU funds in the capital, the renovation of empty and uninhabitable municipal flats should receive a selection advantage. The yardstick should be the cost per habitable flat and the time until tenants move in. New construction is not crowded out by this, but the first part of the 30 billion forints for 2027 would deliver housing faster. According to a survey cited by Index, 60 per cent of contractors plan to raise prices next year. When scheduling renovation projects, capacity must therefore also be considered, because the energy renovation programme draws on the same contractors. MIAK’s separate analysis today deals with this (57,000 home batteries, 120,000 renovated homes). The proposal is the first step of the municipal rental housing module of the SZ3 housing data platform and of the rental housing construction element of DM7.

The three proposals are linked by a common principle: the success of the housing policy turn depends not on the announcement but on the predictability and measurability of implementation. According to the literature frame, housing affordability requires several instruments applied together, with attention to their side effects. And people’s decisions are moved more strongly by the prospect of a loss than of a gain, so an uncertain transition in itself causes market disruption.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Home buyers A fixed cut-off date tied to submission reduces hurried, poor property choices Even a late but clear cut-off date triggers brought-forward demand, only more predictably
Housing market and banks The quarterly statistics show where demand is being diverted, and signal in time the widening of the new–second-hand price gap The banks’ reporting burden grows; the income breakdown requires careful aggregation for data protection reasons
Rental housing supply Renovating empty flats delivers habitable homes faster and more cheaply than new construction After renovation, allocation of the flats remains with the local governments; without a transparent allocation rule the benefit will not reach those in need
Budget The review point allows a more targeted, cheaper design of the interest subsidy If the review brings a loosening, the cost of the interest subsidy rises again

The most important trade-off lies with proposal 3.1. A cut-off date tied to the submission of a complete application gives buyers a wider time window, so according to Portfolio’s estimate the year-end rush may be bigger. A cut-off date tied to contract signing causes a shorter rush but more hurried decisions. MIAK proposes the submission cut-off date, because more important than the size of the rush is that buyers should not lose the benefit because of processing time, and should not have to choose a home within a few weeks. The rush is moderated by announcing the cut-off date early, not by narrowing the time window. The risk of proposal 3.2 is that the review turns into a political bargain. Only metrics fixed in advance and public data reduce this. With proposal 3.3 the main question is allocation: if, after the renovation of the empty flats, it is not transparent who gets them, the flats will not necessarily go to those in need. The inventory must therefore also include the allocation rules.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK proposes tracking the following performance indicators (KPIs, Key Performance Indicators):

  • Transitional rule: whether by 7 November 2026 the Government publishes the launch date of Wekerle Plusz and that the cut-off date refers to the submission of the complete application.
  • Take-up statistics: whether the first quarterly publication, broken down by age, income decile, county and new/second-hand home, appears by 30 April 2027.
  • Rental housing inventory: whether the national, settlement-by-settlement municipal rental housing inventory, with the number of empty and uninhabitable flats, is completed by 31 March 2027.
  • Flats lived in again: how many previously empty or uninhabitable municipal flats get new tenants by the end of 2027 through the Wekerle programme or the capital’s EU projects.

5.2 Summary

MIAK asks the Government to fix the cut-off date of Wekerle Plusz by the first week of November, tied to the submission of the complete loan application, and to publish the full set of rules at least one month before the launch. The Hungarian State Treasury should publish every quarter who uses the programme, and after one year the Government should publicly review the interest rate difference and the age limit. In the rental housing programme, the renovation of empty and uninhabitable municipal flats should receive priority, on the basis of a national inventory. The proposals touch on two MIAK foundational values. Data-drivenness, because today not even the banks know enough about the effect of narrowing eligibility, and the review can only be based on data. Transparency, because the uncertain transition shifts the risk of the timing of a government decision onto buyers, while the condition and allocation of rental flats are not visible today.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

Left-liberal band. Telex put the supply side in the foreground. Based on the mayor’s letter to the districts, it wrote about municipal rental flats to be renovated with EU funding, and gave a long statistical retrospective of the shrinking municipal housing stock and of the difference between student hostel and private rental prices. In the processed set, the pieces of HVG and 444.hu did not discuss Wekerle Plusz separately.

Mainstream band. Index examined the price of renovations on the basis of a contractor survey and a wage comparison by the construction industry’s interest group. It highlighted that most businesses plan further price rises. In the processed material 24.hu and ATV did not analyse the changes to the loan programme.

Economic band. Portfolio was the main source on the topic. It summarised the changes in ten points, calculated the expected additional monthly repayment for second-hand homes, and published an expert estimate of the brought-forward demand. The outlet called the targeting of the change fair, but pointed out that the more favourable rate for new homes benefits higher earners. In another article it collected developers’ cautiously positive reactions to the VAT decision and Wekerle Plusz (only the introduction of the article was publicly available).

Government-critical conservative band. Magyar Nemzet put the emphasis on the tightening: it presented the higher interest rate, the age limit of 41 and the exclusion for existing home ownership in a “many may end up worse off” frame. The outlet also published the advice of a credit expert who warned of the risks of hurried buying. The pieces of Mandiner and Népszava were not in the processed set.

6.2 Facts and data

Data Value Source
Otthon Start loan contracts so far some 70,000 Portfolio, 20 October 2026
Wekerle Plusz interest rate for new homes a maximum of 3% (fixed), for second-hand homes 5% announcement by Péter Magyar, cited by Portfolio and Magyar Nemzet
Market mortgage rates 6–7% Portfolio, 20 October 2026
New eligibility conditions exclusion for existing home ownership of 50% or more; 5-year residence obligation; age limit of 41 Portfolio; Magyar Nemzet, October 2026
Unchanged elements Otthon Start contracts already concluded; CSOK Plusz, rural CSOK, baby expecting loan Portfolio, 20 October 2026
Estimated drop-out 35–50% of borrowers so far banks’ estimate, cited by Portfolio
Age of borrowers 6 out of 10 borrowers under 35 Magyar Nemzeti Bank (MNB), cited by Portfolio
Brought-forward loan demand up to HUF 100 billion; with a 31 December submission cut-off date, +HUF 50 billion in November–December Portfolio, expert estimate
Difference in repayment for second-hand homes on a HUF 35 million loan, +HUF 37,000 per month, +HUF 8.9 million over 20 years compared with Otthon Start Portfolio’s calculation
Average price per square metre of new and second-hand homes HUF 1.293 million and HUF 625,000 respectively KSH, cited by Portfolio
House price growth 2025: 23.5% nationally, 25.4% in Budapest; to mid-2026: 12.3% and 8.3% respectively MNB, cited by Portfolio
Number of municipal rental flats 2000: 176,501; 2025: 98,635 Telex, 23 October 2026
Municipal flats let on a social basis 2016: 59,000; 2025: 33,500 Telex, 23 October 2026
Empty Budapest district municipal flats 7,691 (a fifth of the stock); uninhabitable: 2,600 (2022) Telex, 23 October 2026
Rental housing and student hostel budget in 2027 HUF 30 billion Telex; Portfolio
Contractor price rises 51% raised prices in 2026; 60% plan a rise in the next 12 months Daibau survey, cited by Index, 23 October 2026

6.3 Policy dimensions

  • Construction affairs (programme points) — the housing construction and housing market data platform (EP2), tracking contractor capacity and prices (EP4);
  • Social policy (programme points) — the municipal rental housing module of the housing data platform and the affordability indicators (SZ3);
  • Demography (programme points) — young families’ access to housing and the effect of the age limit of 41 (DM7);
  • Territorial inequality and rural policy (programme points) — the breakdown of take-up by county and settlement type, rental housing projects in larger provincial towns (TE5).

6.4 Literature in detail

6.4.1 European Commission: 2025 Euro Area Report

The European Commission’s 2025 euro area report deals in a separate box with the macroeconomic and social aspects of housing affordability. Its starting point is that housing costs are the largest item of expenditure for many households, and buying a home is often the largest purchase of a lifetime. The report lists the drivers of housing market developments: demography, monetary policy, land-use and building regulation, rental rules, rental support and the social rental housing stock. Its conclusion:

“Addressing housing affordability therefore requires several policies and instruments, and policies with adverse effects should be avoided.” (own translation from the Hungarian rendering)

According to the report, unaffordable housing aggravates the consequences of income inequality, especially for younger households, and housing market cycles also affect budget revenues and expenditure. Applied to Wekerle Plusz: the programme at the same time narrows demand-side support, diverts demand towards new homes, and is linked to the expansion of rental housing supply. Each of these effects may have adverse side effects, such as the widening price gap between new and second-hand homes, or excluded groups being pushed permanently into private renting. These can only be addressed in time if they are measured (3.2).

📖 Source: European Commission: 2025 Euro Area Report (Institutional Paper 304), Box 2.2

6.4.2 European Commission: The European Pillar of Social Rights Action Plan

The 2021 Action Plan of the European Pillar of Social Rights discusses housing in its section on social protection and inclusion. It finds that access to affordable housing is a problem in a growing number of Member States, regions and cities, and that homelessness is rising in most Member States. According to the plan, policies aimed at ending homelessness can only succeed with approaches tailored at local or regional level. On energy poverty it writes:

“Energy poverty affects nearly 34 million Europeans who cannot afford to keep their homes adequately warm, which indicates that many families lack access to affordable, good-quality housing.” (own translation from the Hungarian rendering)

Under the plan, the Commission launched an affordable housing initiative with pilot support for 100 renovation districts. Applied to the Hungarian situation: renovating empty and uninhabitable municipal flats both expands the supply of affordable rental housing and improves the quality of housing. This local-level approach is exactly what the capital’s EU projects and the rental housing element of the Wekerle programme can target (3.3).

📖 Source: European Commission: The European Pillar of Social Rights Action Plan, COM(2021) 102

6.4.3 World Bank: World Development Report 2015

The World Bank’s 2015 report on the psychological factors of decision-making describes loss aversion as one of the basic patterns of thinking. People evaluate their decisions as changes measured against a reference point, not on the basis of absolute values:

“When thinking of something as a loss, people generally perceive the difference as greater than if they experienced the same thing as a gain. Losses are felt more sharply than gains of the same size.” (own translation from the Hungarian rendering)

According to the report, this phenomenon also explains many processes in financial markets. After the announcement of Wekerle Plusz, the reference point became the 3 per cent interest rate. For those intending to buy a second-hand home, the 5 per cent rate appears as a loss, even though it is still much more favourable than the 6–7 per cent market rate. This explains the brought-forward demand and the risk of hurried buying. The lesson for the decision-maker: the prospect of a loss cannot be removed, but the uncertainty can. An early, clear announcement of the cut-off date reduces hurried buying (3.1).

📖 Source: World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015), Chapter 1

6.5 International comparison

Poland: the lesson of phasing out a subsidised loan. In 2023 the Polish “Safe 2 per cent Loan” programme triggered a significant demand rush and rapid price rises, and then the exhaustion of its budget and uncertainty about its termination caused further brought-forward demand. The lesson for the Hungarian transition: the timetable for phasing out a subsidised loan must be announced early and clearly.

Vienna: the rental housing stock as lasting supply. Vienna’s municipal and subsidised rental housing stock provides affordable housing for a significant part of the population, and the system is built on continuous renovation and expansion. The shrinking of the Hungarian municipal stock is the opposite direction. Bringing empty flats back into use is the first, cheapest step towards a turnaround.

The EU renovation districts. The EU initiative presented in 6.4.2 links the affordability and quality of housing through local renovation districts. The capital’s EU projects can follow the same logic.

Construction affairs

  • EP2 — Housing construction data platform
  • EP4 — Transparency in the construction industry

Social policy

  • SZ3 — Housing data platform

Demography

  • DM7 — Housing access programme for young families

Territorial inequality and rural policy

  • TE5 — Local economic development and mobility support

Proposed new programme point: A transitional-rule standard for changes to housing support programmes — the cut-off date tied to the submission of a complete application, announced at least 30 days in advance, and quarterly public take-up statistics — for the Construction affairs area.

6.7 List of sources

Press sources (MIAK press monitor, 24 October 2026 — topic 6):

Knowledge base references (literature):

  • 📖 European Commission: 2025 Euro Area Report (Institutional Paper 304)
  • 📖 European Commission: The European Pillar of Social Rights Action Plan (2021)
  • 📖 World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015)

MIAK internal materials:

  • MIAK policy area: Construction affairs (programme points; programme point ID: EP2, EP4)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ3)
  • MIAK policy area: Demography (programme points; programme point ID: DM7)
  • MIAK policy area: Territorial inequality and rural policy (programme points; programme point ID: TE5)
  • MIAK press monitor, 24 October 2026 — topic 6, score: 76/100

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