Approximately 30%–50% of newly built flats could not be sold last year, and debts on the housing market have been surging, according to the latest figures from real estate investors. While the number of sold homes grew in 2004, the number of construction permits started to fall.

Home loans also have become less attractive; the number of loan contracts in the first 11 months of 2004 equaled the total number of contracts made in 2002. The decline is the largest in the case of state-subsidized loans; their number fell 60% between 2002 and 2004.

The central budget allocates a total of HUF 272 billion for home subsidies in 2005, said József Leitner, deputy chairman at the National Housing and Construction Office. This year the state provides HUF 3 billion as state guarantee for young couples’ housing loans. Hungarian families are offered a total of HUF 7 billion–HUF 8.5 billion as social allowance for housing loans, while those renting a flat receive a total of HUF 3.4 billion.