Hungarian government plan to sell municipal apartments fires fire, Real Estate News, ET RealEstate
The bill, submitted to parliament this week by Laszlo Borocz, a member of the ruling Fidesz party, proposes that apartments owned by municipalities and the state be sold to tenants for 15-30% of their market price.
The bill would not ban the immediate resale of apartments, many of which are located in Budapest’s most expensive castle district.
The text of the bill says the move would help families who cannot afford their own homes due to a recent rise in house prices.
Since 2015, Hungary has seen a sharp rise in house prices, driven by generous subsidies given to families to buy a new home and interest rate cuts fueling investor demand.
However, critics, including some within Fidesz, say the legislation would worsen the housing crisis by dismantling the municipal social housing system.
“The dismantling of this safety net will deprive the most vulnerable of the opportunity for decent housing,” a statement from 25 NGOs, including Amnesty International Hungary and Habitat for Humanity Hungary, said on Friday.
According to the Central Statistical Office, 105,174 apartments were owned by municipalities in Hungary in 2019, or 2.6% of all apartments in the country.
In a rare sign of opposition within Fidesz, party member Peter Kovacs, the mayor of Budapest’s 16th district, called the bill “absurd” and “unfair”. He said the sale of the apartments meant his municipality would no longer be able to help those in need.
Selling the 200 units in his neighborhood would mean a loss of 3 to 8 billion forints (10 to 27 million dollars) for the municipality, he wrote on his Facebook page.
The opposition mayor of Budapest’s 13th district, a municipality with nearly 6,000 apartments, also criticized the bill on Facebook. Jozsef Toth said the municipal apartment rental system was being sacrificed as the wealthiest were ready to benefit from the proposed move.