Kováts Bence: The Financialisation of Housing and Housing-related Family Support in Hungary
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4. Housing-related family support in Hungary
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4.1. Family support in Hungarian housing studies
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4.1.1. The transition approach
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4.1.1.2. The post-state socialist period

4.1.1.2. The post-state socialist period

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The three decades following the 1989 regime change are described by the transition approach as an unsuccessful quest for a market-based housing system envisaged in the form of an ideal typical liberal housing system characterised by easily accessible mortgages, very limited means-tested subsidies and a residual, but sizable social housing stock (Hegedüs, 1998, 2006). The fact that the Hungarian housing system does not resemble this model even three decades after the regime change is explained by the haphazard nature of policy-making that keeps the Hungarian housing system malformed (Hegedüs, 1998, 2006; Augustyniak et al., 2019; Csizmady, Hegedüs and Vonnák, 2019).

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Authors distinguish among four periods in terms of housing system formation: reformist state-socialism (from the late 1970s until 1989), early transition (from 1990 until the millennium), expansion of mortgage lending (from the millennium until 2008) and crisis management (from 2009 until around 2015). They divide the expansion of mortgage lending to two subperiods of subsidised mortgage-lending (until 2004) and forex mortgage lending (2005-2008) (Hegedüs and Somogyi, 2016; Augustyniak et al., 2019; Csizmady, Hegedüs and Vonnák, 2019).

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According to the transition approach, decision-makers and public administration gaining experience in a state-socialist housing system did not have the capacity and motivation to implement “efficient” housing policies required by a market economy. NRH construction, falling already in the 1980s, came to a halt after the regime change while privatisation of public housing units occurred on a large scale. Subsidised fixed-rate mortgages, housing construction subsidies and later tax benefit of housing construction were abolished. Mortgages were available at only very high interest rates due to the low profitability of housing investment, inefficient foreclosure legislation, a small, inefficiently operating NRH sector and mistargeted subsidies introduced on an ad hoc basis or as a result of successful and unrestricted business lobbying (Hegedüs, 1998, 2006; Hegedüs and Somogyi, 2016; Augustyniak et al., 2019).

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The new period started around the end of the millennium when mortgage lending expanded first in the form of generously subsidised mortgages which later became substituted by the unleashing of risky mortgage lending in foreign currency, supported by home-ownership subsidies (Hegedüs and Somogyi, 2016; Augustyniak et al., 2019; Csizmady, Hegedüs and Vonnák, 2019). After the GFC, the unfavourable change of exchange rates brought about the spike of the sum of mortgagors’ debt and monthly instalments (Csizmady, Hegedüs and Vonnák, 2019).

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In the post-crisis years, several unconventional measures were taken to mitigate the debt crisis. These measures predominantly targeted debtors with higher income and savings, but some provided help to lower-income households (Hegedüs and Somogyi, 2016; Hegedüs, 2017; Augustyniak et al., 2019; Csizmady, Hegedüs and Vonnák, 2019). This most recent shift in housing policy is seen as a backsliding into the old post-state socialist “malformed” housing system where mortgage lending is restricted and subsidies are mistargeted (Augustyniak et al., 2019; Csizmady, Hegedüs and Vonnák, 2019). Hegedüs and Somogyi (2016, pp. 216–217) envisage the emergence of a highly regulated mortgage market similar to the one that operated during state socialism. In this sense, authors following the transition approach anticipate the country will not end its transition in the near future (Csizmady, Hegedüs and Vonnák, 2019).

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In the interpretation of Hungarian policy developments by the transition approach, similarly to Tsenkova (2009), Norris and Domański (2009), Stephens, Lux and Sunega (2015), familialism is viewed as a form of emergency provision in the decades of transition. The state retreated from housing provision, but has not yet been capable of creating conditions for the “efficient” functioning of a market-based housing system characterised by the easy access to mortgage and the availability of public support to those on low incomes who cannot access housing on the market (Csizmady, Hegedüs and Vonnák, 2019).

Jegyzet elhelyezéséhez, kérjük, lépj be.!

In this vein, authors aligning with the transition view emphasise that reliance on the family was high at times when mortgages were less accessible: in the period from 1980 to 2000 and the post-crisis years (Csizmady, Hegedüs and Vonnák, 2019). In the first period, authors see self-build (ibid, pp. 7-8) and intergenerational co-residence (ibid, pp.17-18) as the primary fields of family support. Mortgages denominated in foreign currency of the 2000s are argued to have offered an affordable but risky market alternative to intergenerational co-residence or other forms of precarious housing for low-income individuals (ibid., p. 17). In turn, after the GFC when new homeowners faced the explosion of their monthly instalments, the family is argued to have again had to assume a bigger role in housing provision in the form of self-build, intergenerational co-residence or intergenerational financial transfers (ibid., p. 24).
 
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