The Hungarian mortgage market takes off after years in doldrums with some developers expecting ''the big leap in 2018 and 2019''. As Laura Frykberg reports, it's mainly down to the country's low interest rates.
It's a common sight and sound in Budapest... The Hungarian capital is catering for a property boom. Banks predict more people will take out mortgages this year... Than any other, since the 2008 global financial crisis. (SOUNDBITE) (English) ANALYST OF KH BANK, DAVID NEMETH, SAYING: "It's been driven by the low interest rate environment. The government has substantially cut the base rate over the last few years. Internal interest rates also moved down thanks to the monetary policy changes." Nine years on though, and many still remain cautious. The crisis saw tens of thousands of Hungarians default on their loans. After taking out cheap foreign currency credit. (SOUNDBITE) (Hungarian) BUDAPEST RESIDENT, TAMAS BALOGH SAYING: "I looked into which mortgage suited me best financially - I did manage it in the end, fortunately, but it took a long time, about 2 years, for me to find the right one." The government has since banned borrowing in foreign currencies. That, low rates and increasing real wages has sent house prices soaring. The cost of new homes in Budapest rose more than 50 percent over a two year period meaning demand is outstripping supply. (SOUNDBITE) (Hungarian) SALES AND MARKETING DIRECTOR OF DEVELOPER METRODOM, TAMAS KRICSFALUSSY, SAYING: "Now almost everyone is struggling with shortages, that's why it's uncertain how many homes will be ready over the next two years." For now, at least, the property peak bodes well for the wider economy. Predicted to rise more than 4 percent this year and next.