National Bank of Hungary (MNB) governor György Matolcsy presented a laundry list of flaws he found with the governmentʼs housing policy and pressed for a new, sustainable strategy in an opinion piece published on Novekedes.hu on Monday, state news wire MTI reports.
Matolcsy acknowledged that the governmentʼs housing policy, launched in 2014, was founded on successful management of the crisis, a fiscal turnaround, and the phasing out of Swiss franc-denominated retail loans, but he said the policy was "hemorrhaging" from the start.
He complained that no state organ had been put in charge of the policy, the policy lacked a tried and tested strategy, and it applied lopsided tools that boosted demand but not supply, thus creating inflation. There was no coordination with regional policy, transport developments, construction and building materials industry investments, and vocational training; the policy was not environmentally friendly, it favored owners over renters, and it ignored international policy examples.
Matolcsy noted that the supply-demand mismatch had pushed up home prices in Hungary by 104% since 2014, and by 184% in the capital alone.
He urged decision-makers to see housing policy as a national reserve and called for the establishment of a government organization dedicated to creating "a vision, a strategy and a sustainable home market". This will require the government and the home industry to reach a consensus on housing policy, he added.
In recent years, Hungaryʼs government has rolled out a number of measures supporting home purchases by families with children. It also temporarily lowered the VAT rate on home construction from 27% to 5%.