The effect of CSOK is already visible in real estate pricingsMay 30th, 2016
The average price of flats meeting the requirements of CSOK with a total area larger than 40m2 was 338 000 HUF/m2 in the beginning of February this year, which showed a 2% rise compared to the prices effective at the end of December 2015.
It’s more rentable to acquire a loan to buy properties than to rent them
The average prices of flats in the capital has risen by 3.3%, reaching as much as 427 000 HUF – out of the chief cities, Győr has the highest pricing, while the biggest rise (more than 10% in total) happened in the town of Szolnok. According to ingatlan.com’s predictions, the modified rules and guidelines of CSOK can lead to further stimulation on the market.
Standardised rules, simpler conditions
The government has recently introduced a less strict set of rules for the new housing allowance program, which has been started in January. Due to the modifications, the previously set 30 million limit for new estates bought has been officially abolished, while new, better conditions apply to obtain benefits for the purchase of used homes as well. As a result, regional differences concerning price limits will also cease to exist. Moreover, child benefits are becoming uniform too. The minimum size will still vary according to the number of children in the family: in case of a single child, it’s 40 m2, while two children increase it to 50 m2 – three children require a 60 m2 minimum, while four require 70 m2. Moreover, the grant will be uniform, and its exact amount will be also determined by the number of children in the family: one child allows a 600 000 HUF allowance, two provide 1.43 million, three can get applicants 2.2 million, while you get a total of 2.75 million HUF for four children.
According to László Balogh, ingatlan.com’s lead economy expert, the further moderation of rules were introduced due to the fact that the continuously growing interests on the real estate market have usually concentrated on previously used properties. “Our site had an average daily visitor count of 108 000 people looking for estates last year, while since the introduction of the expanded CSOK, this number has risen to 150 000 daily visitors, which equals a 39% growth.”
Lots and flats are sold incredibly quickly: the CSOK-boom is still going strong
The recent governmental measures have triggered a significant interest on the residential real estate market, the building property market has witnessed somewhat of an explosion due to the installation of CSOK. As far as used properties are concerned, the prospects are more positive as well, while the “winner” of this new funding and allowance construction is clearly Budapest, the capital city.
Besides the increased amount of inquiries, it is worth to note that 87% of phone-made, serious inquiries are in regards to previously inhabited flats. Ingatlan.com’s expert also commented that the most significant change is the abolition of the maximum limit with regards to the prices per m2 in case of previously inhabited flats, and that the value of used flats involved in the program will be extended to a countrywide maximum of 35 million HUF. “The recent modifications mostly benefit buyers from Budapest, as the previous set of rules didn’t necessarily set limitations in case of properties in the rest of the country” – emphasised Mr. Balogh. The rule that permits a maximum of 20% with regards to purchase prices exceeding the sale value determined by credit institutions remains unchanged.
Prices continue to rise across the country
Due to the newly softened rules and requirements of CSOK, the minimum area of used flats available for purchase with the help of the program became 40 m2. Ingatlan.com thus decided to research brick-built properties bigger than 40 m2 available for sale in the early days of February and look through the offers and prices. Results show that the average price per m2 of the properties examined was 338 000 HUF, which indicates a 2.1% rise compared to figures effective at the end of December 2015. “The prices are the highest in the capital, which also elevates the country average” – explained László Balogh. In Budapest, the same category had an average price of 427 000 HUF per m2 set for sale in the first weeks of February, which means a 3.3% increase in comparison to the prices from a mere month and a half before. The most expensive district in the capital resulted to be District V., the same average being 708 000 HUF per m2, which indicates a 1% rise compared to earlier figures. While District XXI. appears to be the least expensive area with its average prices of 243 000 HUF per m2, the figures here have risen considerably as well, resulting in a 7% difference compared to the prices effective at the end of last year.
The second most expensive city in the country, following Budapest, is Győr. The prices in the same category have risen by 0.5% in a mere month, reaching an average of 291 000 HUF. In Debrecen, February averages were at 271 000 HUF, after a 2% increase – the town of Székesfehérvár saw a 4% increase, average prices reaching as high as 265 000 HUF. The cities and towns of Szeged, Kecskemét and Veszprém also experienced an advance in prices, with a percentage between 3.4 – 3.9%, average prices per m2 being between 212 000 – 246 000 HUF. The biggest rise in prices occurred in Szolnok, where the average prices per m2 for previously inhabited, brick-built apartments bigger than 40 m2 have risen by a staggering 12.3% percent, reaching 179 000 HUF.
As Mr. László Balogh reckons, as a result of the new, more moderate set of rules of CSOK, there could be a heightened activity on the used homes’ estate market, to which the fact that many families plan to sell their current homes to utilise the benefits of the program themselves, can also contribute. That will, however, take some time, as the earliest emergence of newly constructed dwellings on the market en masse is expected to happen in 2017.
CSOK can be accounted as own funds
Loan associations accept the 10 million HUF home allowance benefits (CSOK) as own funds in case of purchasing real estates.