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Analysts, contractor association chief welcome govt home-creation program

The head of Hungary's building-contractor association and housing-market analysts told MTI that the government's home-creation program announced on Wednesday is likely to lead to a moderate rise in demand for houses.

Tibor Tolnay of the National Federation of Hungarian Contractors said he welcomed any measures that serve to spur activity in the construction industry. Tolnay said that the organization hopes the new measures will first prompt the sale of finished but so far unsold new homes which number several thousand, then the resumption of discontinued projects, and demand for new constructions will reappear later.

Chief Analyst Attila Déry of home broker franchise Otthon Centrum said the measures will increase demand for homes, though it remains to be see to what degree. Déry cautioned that it is not certain that many people who already have debt will elect to purchase homes. Déry added that the number of families expected by the government to avail of the new opportunities compares to 90,000 transactions on the housing market last year.

Economy Minister György Matolcsy announced on Wednesday that the government will reintroduce home-acquisition grants for families with children and plans to provide an interest rate subsidy for forint home loans in 2012. The minister said the government expects to disburse grants to 4,000 families next year, and the government expects 3,000-5,000 families to take advantage of the interest rate subsidies also next year.

OTP Mortgage Bank analyst David Valkó said that the stricter conditions surrounding home grants and the lower sums of grant support indicate that the government is attempting to correct the former home-grant and interest rate subsidy system's flaws and reduce the burden on the central budget. The former programs were withdrawn by the previous government in 2009 at the height of the international financial and economic crisis.

Déry said that the home-creation program will improve demand for homes, adding that those who live in smaller, salable homes and want to move into a smaller, less expensive home will be able to find purchasers more easily as a result of the program.