The Wekerle Housing Construction Programme also envisages the development of brownfield sites

The government is to finalise the details of the Sándor Wekerle Housing Construction Programme by 31 December. The aim of the preparations is to boost domestic housing construction, increase the number of affordable rental flats and student accommodation places, and establish a sustainable institutional rental housing sector in the long term, said Dávid Vitézy, Minister for Transport and Investment.

For the time being, the government has not decided on the programme’s final content, but rather on the tasks required to draw it up. Over the coming months, in addition to the support and financing arrangements, the related tax, construction and operational regulations will also be reviewed. Local authorities, financial institutions, property developers and players in the construction industry will also be involved in the consultations.

The aim is to boost housing construction and tackle the housing crisis

One of the reasons for drawing up the programme is the low number of new homes being built in Hungary. According to figures presented by the minister, in 2025 there were 1,256 new homes completed per million inhabitants in Hungary. In Austria and Poland, several times as many homes were built per capita, whilst the figures for the Czech Republic and Romania were also more than double the Hungarian figure.

Demand for new flats is particularly high in Budapest, in other major cities, and in university and business centres. This demand is further fuelled by a shortage of places in halls of residence, as a significant proportion of university students look for accommodation on the private rental market.

One of the most important elements of the Wekerle Programme may therefore be to increase the number of affordable rental flats and to establish an institutional rental housing sector. To this end, it may also be necessary to amend the rules governing the financing, construction and long-term operation of residential property developments.

Under the plans, the state and local government sectors could play a more active role in investment than they do at present. In addition to its regulatory functions, the public sector could also act as a financier, a landowner and a collaborative partner in certain projects.

The total value of the programme could be as high as three billion euros

550 million euros is available from the European Union’s Recovery and Resilience Plan for the construction of new rental flats and student accommodation. This sum is expected to cover 20 per cent of the investment costs, with the remainder to be provided through market-based financing. The scheme could thus kick-start property development worth more than two billion euros. With co-financing from the European Investment Bank, the total value of the programme could approach as much as three billion euros.

Private developers, institutional investors, property funds, project companies and non-profit organisations can all be involved in the implementation of these projects. Universities may also play a role in student accommodation developments.
In return for state or EU funding, a specified proportion of the developments would have to be used for affordable housing. The detailed financial and technical conditions of the scheme will be drawn up by the end of the year.

They are thinking in terms of developing entire neighbourhoods, rather than individual buildings

In the case of subsidised development projects, it is not solely the number of flats to be built that would be the decisive factor. Mr Vitézy emphasised that the projects must also ensure appropriate architectural and urban planning standards, energy-efficient operation, and the community and service infrastructure necessary for everyday life.

A key consideration could be that new flats and halls of residence are built in areas that are easily accessible by public transport. The programme would thus encourage the development of neighbourhoods featuring communal spaces, services and good transport links, rather than standalone residential blocks.

Different support measures may be required in Budapest and in provincial towns. In the capital, market-led housing developments can be carried out without support; therefore, the focus here may be primarily on improving the quality of urban design, developing the necessary infrastructure and ensuring an adequate proportion of affordable housing.

At the same time, in regional university and business centres, lower sale prices mean that it is more difficult to launch many property development projects on a commercial basis. In these locations, additional financial incentives could help to facilitate such investments.

Brownfield sites could be reintegrated into the urban fabric

The primary locations for new residential and student accommodation developments could be Budapest and brownfield and underutilised sites in larger provincial towns. The programme would encourage the regeneration of disused industrial, railway and other urban sites.

Construction within the existing urban fabric can help to limit the spread of towns, the further encroachment on green spaces and the growth in new transport demand. Energy-efficient design and adequate links to public transport may be key technical requirements for such developments.

The development of these neighbourhoods may therefore require not only the construction of residential and student accommodation buildings, but also the development of roads, utilities and public spaces, as well as the establishment of community and service facilities.

A mixed-use neighbourhood could be developed in the Diákváros area

One of the programme’s key locations could be the Diákváros area in southern Pest. The previously completed masterplan for the development will be reviewed, after which preparations for the project can continue on this basis. According to the announcement, the relevant properties and planning documents are expected to be submitted to the Ministry of Transport and Investment by the end of August. He added that the old plans need to be reviewed, but the fundamental aim is to launch a mixed-use residential and student accommodation development there for students, young workers and those in shortage occupations.

Thirty-three housing developments are being reviewed

In parallel with the development of the Wekerle Programme, the 33 priority housing projects linked to the Otthon Start programme are also being reviewed. The majority of the projects concerned are located in Budapest. Dávid Vitézy stated that the government is proposing to the National Assembly a review of the „priority decrees”, and public consultation on this will also begin. He indicated that all “Otthon Start” priority decrees will be suspended and reviewed until 31 December, whilst the Wekerle programme is being finalised. He added that this affects 33 projects, mostly in Budapest. The government has also decided to revoke the priority status of several projects, but not those for which a building permit has already been granted, as this would require the payment of compensation. 

The implementation of suspended projects may be resumed provided that certain conditions are met and with the support of local communities

Following the announcement, Samu Szemerey, State Secretary for Architectural and Building Construction Projects at the Ministry of Transport and Investment, provided further details. He also emphasised that, in the case of projects for which building permits have been granted or which are already under construction, the permits will naturally remain valid and acquired rights will not be lost. He added that, 

In the case of projects that do not yet have a permit, or where the planning permission process has not yet begun, it will be possible to obtain permits provided that they meet the relevant transport, urban planning, affordability and sustainability criteria and have the support of the local authorities.

The State Secretary also pointed out that, even in the case of suspended projects, the aim is not always to prevent them from going ahead, but rather, where this is compatible with the interests of local communities, to steer these investments in a direction that yields high-quality, sustainable results that are acceptable to everyone. Mr Szemerey stated: „Our primary objective is to stimulate the property market and to create a transparent, predictable and supportive legal and policy environment for housing construction and investment, with appropriate tax incentives and a range of further measures.”