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The effect of GFC on tenure choice in a post-socialist country – the case of Hungary

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  • Adrienne Csizmady
  • József Hegedüs
  • Gyula Nagy

Abstract

In Hungary's housing system, home ownership has become the dominant tenure, covering 85%–90% of the housing stock after the first decade of intensive privatisation in the 1990s. Mortgage loans were heavily subsidised between 2000 and 2004 as a part of pro-homeownership housing policy. After cutting the subsidies in 2004 (as the cost of the subsidy programme was unsustainable), the tenure preferences of households have not changed: the low interest rate, high risk foreign exchange mortgage became the typical loan product. After 2008 the housing and mortgage market collapsed: new construction decreased by 70%--80%, housing transactions plummeted, house prices decreased and mortgage arrears become a huge social problem. The mortgage crises proved that homeownership could be as risky and unpredictable as renting. It is expected that there will be a shift in tenure choice as a consequence of the mortgage crisis. The paper sets out to assess if stakeholders in the housing sector (households, government, banks, etc.) will learn from these experiences, and start showing a stronger preference and support for renting, which could result in a more balanced tenure structure and more stable housing system.

Suggested Citation

  • Adrienne Csizmady & József Hegedüs & Gyula Nagy, 2017. "The effect of GFC on tenure choice in a post-socialist country – the case of Hungary," International Journal of Housing Policy, Taylor & Francis Journals, vol. 17(2), pages 249-275, April.
    • Handle: RePEc:taf:intjhp:v:17:y:2017:i:2:p:249-275
    DOI: 10.1080/19491247.2017.1293409
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    Cited by:

    1. Adrienne Csizmady & Lea Kőszeghy, 2022. "‘Generation Rent’ in a Super Homeownership Environment: The Case of Budapest, Hungary," Sustainability, MDPI, vol. 14(14), pages 1-18, July.
    2. Adrienne CSIZMADY & Ã gnes GYÅ RI & Ã gnes GYÅ RI, 2022. "No money, no housing security? The role of intergenerational transfers, savings, and mortgage in mobility within and into insecure housing positions in Hungary," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 13, pages 208-227, June.

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