How difficult will it be to spend the government support family benefit?
February 9th, 2016

The government support family benefit (CSOK) in Hungary provides 10+10 million Forints to families with three children with minimal risk, supply and demand however don't meet everywhere. Where there are no investors many would have to resort to building their own homes.

The allowance is naturally tied to a number of conditions. Those who want the 10+10 million must spend it on hoes with all modern conveniences, apartments must be at least 60 m2 in size and houses at least 90 m2, and they must possess construction and utilization permits issued after 1st July 2008. If the family wants a newly built estate they can acquire it in two ways: either buy one from the developer or build one themselves.

The least amount of risk – considering that there is a loan involved and that those who opt for the allowance must have three children in a predetermined timeframe – is taken by those who already have three children in the family.

There are however few estates on the market that meet the criteria. In Budapest for example there are only 6 for every 100 families with 3 children. This will likely result in a growing demand among the so called CSOK-estates and also increase the number of constructions.

But the market must also calculate with more estates being introduced to the market as families that decide that they will build a new home will likely sell their old one. As supply grows in the segment selling them could prove more difficult.

In smaller towns and villages the situation is even worse as there are no more than one CSOK-qualified house for every 100 family – and larger families tend to live in the3se areas in greater numbers. Therefore there will be a great difference in supply and demand in the Hungarian countryside.

On average it is much cheaper to buy an estate with the same condition than to build a new one, but location can be a very important factor in this question.