As state-backed demand drives prices higher, one buyer’s story reveals who still gets in…and who is shut out
24 April 2026
Photo: Olya Kobruseva
12 April 2026. Budapest pulsed with the kind of electric tension an election day can summon. I called Szilvia that Sunday in her 25-square-meter flat, a tiny sanctuary with walls freshly painted pink by a neighbor’s father. Inside, it was quiet. Outside, the city held its breath, waiting to see if 16 years of political rule would snap or extend its grip.
Szilvia, 38, is a sourcing recruiter with a strong grasp of several languages. She is, by her own account, one of the lucky ones: she managed to buy her own flat in Budapest’s hyper-inflated market. Yet, her triumph underscores the severe structural inequalities within Hungary’s housing system.
State-sponsored exclusion: While housing costs have climbed across Europe, Hungary has become a radical outlier. Since 2015, house prices have surged by nearly 300%, well over four times the EU average, driven by aggressive government subsidies that incentivise traditional families while inflating costs for everyone else. Over the same period, prices have risen roughly seven to eight times faster than incomes, dramatically widening the affordability gap. This analysis finds that by turning homeownership into a reward for a specific social model, the Hungarian state has effectively priced out single citizens, the vulnerable ones, and those in the unregulated rental market, leaving them to rely on chance and informal networks to secure a roof over their heads.
The Hungary outlier & its family housing policy
In the same week voters headed to the polls, new Eurostat data confirmed Hungary’s status as Europe’s most extreme housing market. While in the past decade house prices across the EU rose by an average of 65%, Hungary has pulled far ahead, with price growth roughly 4.5 times the EU average.
Figures 1 & 2: Hungary has seen the fastest house price growth in Europe since 2015, around four to five times the EU average, based on change from the 2015 annual average to peak levels in 2025. Data source: Eurostat
A crucial driver of this inflation was the Fidesz–Viktor Orbán government’s family housing policy, built around the CSOK (“Family Housing Allowance Program”) and Babaváró Támogatás (“Subsidy for those Expecting a Baby”) schemes, introduced in 2015 and 2019, respectively. Together, they combine subsidised mortgages (typically offered at fixed interest rates of around 3%) with conditional, interest-free loans, largely restricted to heterosexual married couples who have or commit to having children.
“With these programmes, suddenly many more people had enough money to buy,” Szilvia explains.
But because the number of available homes didn’t grow as fast (constrained by a slowdown in residential construction activity, declining building permits, rising construction costs, and persistent labour shortages), it triggered a bidding war and pushed up house prices.
“Sellers give a price and prospective buyers just bid higher…they will pay higher than the asking price to get the property.”
Figure 3: House prices have consistently outpaced construction activity since 2015 (both indexed to 2010 = 100), exposing a widening demand–supply gap. Data source: Hungarian Central Statistical Office & Eurostat
An informal rescue
Szilvia’s path to ownership was unorthodox.
Szilvia in Budapest; Photo: Author
“I didn’t want to buy for a long time. But the landlord told me I had to vacate the flat, and rents kept going higher and higher.”
As an unmarried woman, Szilvia was not eligible for CSOK and Babaváró.
Instead, the opportunity came through informal networks: a personal contact connected her to a seller who had not listed the property online and was looking to sell quickly.
Szilvia says that her success depended on a relatively high income and savings from years of working in international environments combined with disability support (as she lives with visual impairment and reduced mobility), a below-market opportunity accessed through informal networks, and favourable timing within a volatile market – the sale took place a few months before Otthon Start (a 3% loan for first-time buyers with no family commitment requirements) was introduced.
Photo: AS Photography
Szilvia’s experience highlights how access to government support is often structured in ways that favour married, heterosexual couples with children, or those who pledge to have them.
“Mothers with three kids (and soon, those with two) don’t pay 15% income tax…putting a lot of pressure on people who don’t have children.”
She contrasts her situation with that of a close relative, who was able to use government grants for a down payment on a house in the countryside. But the programme carries immense pressure: if the couple fails to have the promised children within a given timeframe, they must repay the subsidy, often with penalties, effectively reverting to market-based interest rates. Divorce can also trigger repayment.
Structurally excluded
The Orbán government’s strategy appears to have prioritised a specific social model while also aiming to stimulate the economy through construction.
In practice, it has left those outside the narrow definition of the traditional family at a disadvantage. For single people, LGBTQ+ couples, or those unable or unwilling to have children this means navigating the unregulated rental market or competing in a subsidised purchasing system that has largely passed them by.
For those shut out of these schemes, the gap between incomes and housing costs makes entry even harder. Over the past decade, wages have risen, but far more slowly than house prices, making it increasingly difficult to save enough for a deposit. According to OECD, average earnings in Hungary increased by around 40% in purchasing power parity (PPP) terms, meaning house prices have risen roughly seven to eight times faster than incomes.
Figure 4: House prices have risen roughly seven–eight times faster than incomes since 2014 (all series indexed to 2014 = 100), driving a sharp affordability gap. Data source: OECD & Eurostat
“People who are not married or don’t have children…it is very difficult to get houses on their own.”
Szilvia describes a rental market that is often informal, where not all contracts are fully declared and landlords can change terms with few constraints. During the 2026 election campaign, the governing party pledged to expand homeownership support, while opposition groups emphasised the expansion of rental and housing supply.
With a new government set to take office, it remains to be seen what measures will be introduced to make the rental market more affordable and secure for tenants. A more effective rental system should enable those who are not eligible for programmes such as CSOK and Babaváró to save more and transition more easily into homeownership.
A wider problem
The housing crisis extends well beyond Hungary. At EU level, discontent is mounting, and countries such as Spain, Portugal, and Italy have seen numerous protests as well as policy shifts. For example, several European countries ended or are in process of ending their golden visa schemes, while cities like Barcelona and Venice have introduced tourist taxes to counter the surge in short-term rentals. Recently, Spain has launched a €7 billion public housing plan aimed at tackling soaring rents and expanding affordable housing supply.
Housing affordability protest in Barcelona; Photo: Emilio Morenatti / AP
The European Commission already presented an Affordable Housing Plan, and is currently preparing an Affordable Housing Act. The proposed measures aim to boost housing supply through construction and renovation, mobilise investment, and reduce administrative barriers.
While challenges remain, these coordinated efforts suggest a gradual shift toward more proactive and systemic solutions. Yet affordability is not the only dimension shaping the housing debate in Europe. With initiatives such as the New European Bauhaus, increasing attention is being given to social inclusion, sustainability, and the quality of living environments.
In Brussels, projects like CALICO combine affordable housing with intergenerational and intercultural living. In Hungary, the Alliance for Collaborative Real Estate Development (ACRED) is developing cooperative, community-led housing models focusing on long-term affordability and shared governance.
Taken together, these initiatives point to a potential new model for housing, one that goes beyond price alone. By pooling resources, sharing spaces, and embedding support networks within communities, such approaches can lower individual housing costs while also addressing wider social challenges: strengthening social cohesion, reducing isolation among the elderly, easing the burden of childcare through collective support, and improving mental well-being. In this sense, housing is not just a financial asset, but a foundation for more resilient and connected forms of living.
A place to call home
Despite the financial strain and bureaucratic hurdles, owning a home has brought Szilvia a sense of security.
“Whatever happens, I am safe. I can’t be asked to leave by a landlord.”
Her flat has also become a small hub of informal community support.
Szilvia describes how neighbours regularly step in to help, for instance, taking out the garbage, which is of great help given her motor impairment. As we speak, the interview is briefly interrupted by a neighbour who drops by to ask Szilvia if she needed eggs, before casually turning the conversation to the ongoing elections.
“Community is the most important thing,” she says. “In big cities, people can live side by side and still feel incredibly alone.”
On that election Sunday, Hungary chose a new leadership, opening the door to systemic change after 16 years under Fidesz–Orbán. Housing policy is likely to be among the areas facing renewed scrutiny, including questions around how to build a more equitable system, one that enables a wider range of households to have a safe place to call home.
The forces that drove the boom (state-backed demand, limited supply, and a deeply entrenched preference for homeownership) will not disappear overnight. The question is whether reform can unwind a market shaped by years of policy distortion or whether it will continue to favour a narrow set of households, leaving others to compete on increasingly unequal terms.