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0% Interest Rate for Green House Construction? National Bank Chief Matolcsy Shares New Idea

Hungary Today 2020.09.16.

0% interest rate for ten years but only for the construction of green, sustainable homes- this is the governor of the National Bank of Hungary (MNB), György Matolcsy’s new idea. He says supply must now catch up to the demand in Hungary’s housing market.

The MNB chief’s recently published article on novekedes.hu has reportedly caused surprise and uproar. In his view, the supply must now catch up to the demand in the housing market both in terms of quantity and configuration after demand for houses had been strengthened due to governmental support. He argues that lifting the preferential VAT back up was also a mistake. He further claims that the current housing policies generate inflation rather than build homes.

Therefore, he announced his new ‘New Home Program.’ The key points of his idea would be to exclusively support building green sustainable homes, and to offer loans with 0% interest rate for a ten year term period (available both for home builders and buyers), beneficial both for the central bank and applicants. Besides families, the scheme would offer resources to property developers too (with a cap).

According to his calculations, the completion of the program would result in 30-40,000 new homes, strong support for the demographic turnaround, a 1% surplus in the yearly GDP growth, and the creation of 40-50,000 new jobs.

Matolcsy: Gov't Can Temporarily Ignore Deficit and Public Debt Targets Until 2022
Matolcsy: Gov't Can Temporarily Ignore Deficit and Public Debt Targets Until 2022

The government can temporarily ignore deficit and public debt targets for a couple of years but these targets must be restored from 2022, György Matolcsy, the governor of Hungary’s central bank, has said. “Hungary has financial resources from the [European Union], the NBH, the banking system, and the savings of households and businesses that are […]Continue reading

Featured image by Zsolt Szigetváry/MTI