The government has approved a 3% home purchase credit programme for first-time buyers, Prime Minister Viktor Orban said during a break at a cabinet meeting on July 2. The latest announcement aims to ease the housing crisis but it is seen by analysts as yet another populist measure before the April 2026 elections.

In a video message posted on Facebook, the prime minister said the new subsidised credit would be available to all Hungarians buying their first home without an age limit, but would stand to benefit young Hungarians the most.

According to details unveiled so far, the credit programme will offer subsidised loans of up to HUF50mn (€120,000) with a fixed 3% interest rate and a maximum maturity of 25 years. The scheme requires a 10% down payment and will be available nationwide.

Orban noted that home prices had jumped in recent years, which was "good news" for the majority of Hungarians, who own their homes, but said there were also many who had not yet been able to buy a flat or a house.

Hungary has experienced the sharpest rise in property prices across the European Union since 2010, with real estate values soaring by 234% over the past 14 years, according Eurostat data.

The government’s family housing support schemes, including interest-free home loans and grants fuelled demand, especially in urban centres like Budapest and large cities with new industrial bases, but at the same time, it failed to provide substantial incentives for home builders to keep the supply steady.

New home completions remain at near all-time lows around 10,000, which is a fifth of the level required to allow the renewal of the home base. Surging home values have priced out young and low-income earners from the housing market, as average gross wages in Hungary are amongst the lowest in the EU.

According to a quick analysis by financial platform Bankmonitor, the new loan scheme offers an exceptionally favourable alternative to current market rates, which average around 6.5% and broaden access to credit for tens of thousands of buyers.

Bankmonitor calculates that a borrower would pay HUF166,000 in monthly instalments for a HUF30mn loan under the 3% rate, compared to HUF223,000 at market terms, resulting in over HUF13mn in savings over the loan’s lifetime. This could enable buyers to borrow more and bid higher for properties, potentially fuelling price increases across the market.

Analysts noted that the HUF50mn upper threshold will do little to stir up the market in the most expensive markets, such as Budapest, but could have an impact in smaller towns.