Housing loan stock expands as a result of state-subsidised lending

The housing loan stock in Hungary stood at HUF 5,003 billion at the end of 2023, which was 1.5% higher than at the end of 2022. The growth rate of the housing loan stock slowed down compared to the annual growth rate of 7.5% in 2022 and between 9% and 15% in the four preceding years. The ratio of housing loans to GDP declined from 7.5% at end-2022 to 6.7%.

At the end of 2023, the stock of government-subsidised housing loans was 7.1% higher, while the stock of non-subsidised loans was 0.3% higher than at the end of the previous year. Unsubsidised loans accounted for the vast majority (81%) of the total housing loan stock.

At the end of 2023, the distribution of housing loan stock by lending institution was essentially unchanged compared to the end of 2022: the share of banks was 59%, mortgage credit institutions 31% and housing savings banks 10%.

The ratio of problem-free loans rose from 86 to 98% between 2015 and 2020, fell slightly during the pandemic, and then reached 98% again by the end of 2023. The non-performing exposure decreased from 3.2% at the end of 2022 to 2.5% by mid-2023 and then to 2.1% by the end of the year. The number of non-performing loans decreased from 21 thousand at the end of the previous year to 14 thousand.

Restructured housing loans accounted for 1.4% of performing loans at the end of 2023, compared to 2.7% a year earlier. Restructuring took place in 46% of non-performing loans, which is a decrease of 13 percentage points compared to the end of 2022.

The amount of loans granted starts to rise after the low in the first half of the year

A total of 51.6 thousand housing loans worth HUF 608 billion were approved in 2023. The number of loans was 45% lower than in 2022, while their value was 49% lower. The total value of state-subsidised loans fell by 56%, while the value of unsubsidised loans fell by 47%, bringing the total amount of housing loans approved back to roughly the same level as in 2017 in nominal terms.

After the low point in the first half of 2023, housing lending showed some recovery in the second half of the year, with the number of loans approved increasing by 7.1% and the amount by 31%, but still far below the level of previous years. The increase in the aggregate value of loans granted is mainly due to a broadly unchanged number of loans granted without aid, but with a higher average value. State-subsidised loans were already approved in 26% more cases in the second half of the year, but their lower weight and more modest increase in average value had less impact on lending flows.

The average amount of credit per authorisation started to decrease in the second half of 2022 (HUF 11.2 million) and this trend continued in the first half of 2023 (HUF 10.6 million), too. In the second half of 2023, the amount of credit per authorisation increased again and reached HUF 12.9 million. The average value of subsidised loans was then HUF 10.7 million and of unsubsidised loans HUF 13.7 million.

New home purchase and modernisation lending fall the most

In 2023, 55 thousand housing loans were disbursed for a total of HUF 639 billion. The number of loans disbursed fell by 41% and the amount by 40% compared to the previous year.

• Home lending continued to be dominated by loans for the purchase of second-hand dwellings, accounting for 54% of the number of loans disbursed and 67% of the amount. In 2023, the number of loans disbursed for the purchase of second-hand housing decreased by 34% and the amount by 32% compared to the previous year. However, the average loan amount increased from HUF 14.0 million a year earlier to HUF 14.5 million. This was the only loan target where the average loan amount increased significantly during the year, from HUF 13.6 to HUF 15.2 million.

• The number of loans granted for the construction of new housing fell by 37% and the amount by 47% compared to 2022. The average loan amount decreased from HUF 6.7 million to HUF 5.8 million.

• The number of loans granted for the purchase of a new dwelling fell by 41% and the amount by almost 45%. The average amount of loans granted for this purpose in 2023 was HUF 18.3 million, HUF 1.3 million less than a year earlier.

• The number of loans for modernisation and expansion has fallen dramatically due to the lack of available subsidies. Their number fell by 59% and their amount by 69% compared to the previous year, with the average loan amount falling from HUF 5.7 million to HUF 4.3 million.

• The number of loan redemptions fell by 59% and their amount by 70% compared to 2022, while the average loan amount decreased from HUF 11.2 million to HUF 8.2 million.

Reduced disbursement of family home creation subsidies

During the period from January 2016 to the end of 2023, the number of family home creation grants (CSOK) paid out by credit institutions was nearly 251,000, amounting to HUF 609 billion. The average amount per disbursement was HUF 2.4 million.

In 2023, the number of grants paid decreased by 44% and the amount by 47% compared to the same period of the previous year.

Of the subsidies, 71% were used to buy second-hand housing and 19% to build or buy new housing in 2023. In terms of the value of subsidies paid, the share of new housing was 31% and 60% for second-hand housing. In 2023, the share of second-hand housing purchases among the beneficiaries increased.

Average amount of CSOK per disbursement in 2023:

• HUF 3.1 million for building a new home (HUF 3.4 million in 2022)

• HUF 4.4 million for buying a new home (HUF 3.9 million in 2022),

• HUF 1.9 million for buying a second-hand dwelling (HUF 2.0 million in 2022), and

• HUF 2.1 million for extensions and renovations (HUF 1.7 million in 2022).

Further data and information

Methodology

Tables (Stadat):
18.2.1.10. Housing loans
Contact details:
kommunikacio@ksh.hu
Contact us
Telephone: +36 (1) 345 6789
www.ksh.hu