This increased interest has also stimulated the rural real estate market, since the introduction of the village GFI on July 1 has seen a revival in the real estate market of small settlements. Not only has supply increased in recent times, but real estate prices have also started to increase. However, this increase in prices is quite different from what customers in the big cities or even Budapest have experienced in recent years. The rules of village GFI are sharply different from the rules of the known GFI.
Continuous price increase
In the villages and small towns the continuous price increase in Budapest, which has been characteristic for several years, did not occur. People living in small settlements have found that their real estate prices are only a fraction of those in big cities or in Budapest.
If this gap were to persist or widen, the wealth gap between people living in small towns and metropolitan areas could become alarming. The first step, therefore, is to bring the prices of real estate in small towns closer to those in big cities. One possibility is the introduction of village GFI support within the framework of the family protection action plan.
With the introduction of village GFI, the government wants to increase population, especially in those settlements where the population has decreased significantly in recent years. However, there are also differences between designated municipalities. Some settlements are more attractive to families moving to the countryside due to their location or better infrastructure. Such settlements can be villages and small towns located in Pest County or near Lake Balaton .
Wide variation in real estate prices
Information from real estate experts also confirms this. The greatest demand was for the previously mentioned settlements on the shores of Lake Balaton and Pest and Fejér counties with good infrastructure. Surveys also show that although there is a wide variation in real estate prices in individual settlements, they show a significant increase every year. In the case of the rural GFI settlements participating in the subsidy, the average price of real estate is around 9 million HUF, which means an increase of more than 10 percent compared to the prices a year ago.
Purchase of real estate
It is important to note that, according to the law, only half of the amount of village GFI required can be used for the purchase of real estate . The purpose of this regulation was precisely to avoid a sudden, drastic increase in property prices. As a numerical example, a maximum of HUF 5 million non-refundable grant and a HUF 7.5 million preferential loan can be claimed within the village GFI.
As the village GFI is a completely new construction, its effects on the real estate market can only be assessed in the future, but it is undoubtedly necessary to make it more attractive to young people planning a family, not only in big cities but also in smaller towns.
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