You would think that buying a home consists of:
- Saving money
- Taking out a mortgage (optional)
- Buying/Building the place
But you would be wrong. In a centrally manipulated economy this is a lot more complicated. People keep an eye on the state that will tell them which way to pull. And the Hungarian government just did that. But with very bleak and confusing instructions.
When young Hungarian couples want to buy their home today they look at the government first. What are the conditions of free money this week?
I was of kindergarten age when I saw out neighbour (a perfectly middle-class engineer) beating up his third-born son in front of their house. He was yelling unspeakable things at the boy for minutes before he hit him and sent him tumbling down the steep garage ramp. I called my grandmother for help.
“Oh, that’s the szocpol child..” – she said as if it was a reason to dismiss it and not to help a child, younger than myself.
Then she dragged me back into the house.
My grandmother wasn’t extraordinarily cruel. It was an accepted fact of life that szocpol children, third children promised to the government in exchange for money to build or extend homes, would naturally be unwanted and abused. Who would blame their parents? (Domestic violence is generally an accepted way of life for many.)
I think of that day every time I hear about a government paying its citizens to produce more unplanned children – aka. future taxpayers (hopefully). So when the Hungarian government had recently announced a new szocpol (called CSOK) I naturally felt disgusted. They would hand out breathtaking sums in exchange for the much-coveted third children – coveted by demographers and government, not necessarily the parents. The sum is 10 million HUF or 30 thousand euros in loans + another 10 million in free money to be spent on whatever the lawmaker allows you to.
But fellow Hungarians were unfazed. The 10+10 million justified putting away dignity and self-determination in family planning. Yes, sure, the government would intrude in their most intimate decisions. Yes, banks would require paperwork about the progress of pregnancies. Yes, they are required to produce children they cannot afford – and the free money doesn’t pay for their upbringing. Yes, they are not allowed to divorce or move out of that house for 10 years. But government said 10+10 million – and everyone was suddenly running to the banks.
And then they ran again to the bank next week, when the government announced changes to the conditions. And the week after. And after that. The rules just kept changing – as if they were just making them up as they went. (They were.)
On top of that, the psychological effect on markets was considerable – and out of proportion. Prices increased literally overnight – long before anyone had even the faintest idea of what kind of properties would be eligible. (Long story short, it is only eligible if your neighbour is a unicorn and your flat is reverse-turtle-shaped.*) Even speculators find it hard to figure out which apartments to buy up, so they buy everything – before the desperate applicants who are undeterred by paperwork (or just used to it) even get their loans and sign away their life choices.
A non-exhaustive list of issues:
Traditional marriage required
I know, I have a first world problem here. But people who don’t choose to blindly sign up for the one-size-fit-all contract called family law are out. This way marriage statistics improve and boost the ego of the patriarch. At least someone enjoys it because CSOK-children and their frustrated parents certainly won’t.
(On a sidenote – The infamous migrant-hunter Jobbik mayor of Ásotthalom just banned non-traditional, not just man-woman relationships in his town. No, he can’t – but yes, he can.)
Must not divorce, must not move. Not even for work. As if mobility within Hungary wasn’t way too low already. Regional differences in the job market simply don’t disappear because people don’t move. They own their houses, they cannot sell them and they are not the mobile types anyway. But if someone takes the extraordinary decision to move – they might as well leave the country.
And again – a promise not to divorce for ten years is the recipe for love, it’s just that no one thought of that before. It creates a happy marriage, produces well-rounded children and not-at-all-frustrated adults.
For 6-8 weeks I have been watching with a mixture of bemusement and horror as the required shape, size, room number, heating type, location, etc. of the eligible homes kept changing. But countless people have already started the application and kept putting an extreme bureaucratic effort into finding the elusive eligible apartments, or buying building permits to build eligible homes (and benefit from a VAT-cut on new home building). It was farcical, but also very sad.
Not for those moving back to Hungary
Yesterday I spent 25 minutes in a bank unwillingly listening to the conversation between a pregnant customer and a bank clerk. The customer was trying to secure CSOK – and in the meantime let us in into their lives.
They signed to take on two more children than planned, try to move back to Hungary from abroad, have been trying their luck with the third property – but somehow all of them proved to be ineligible for CSOK.
And the Byzantine paperwork was overwhelming. The much-coveted young people moving back from abroad, for instance, cannot get CSOK because they don’t have 4 months’ worth of social security at home (a random rule, one of many). The lady kept listening for 25 minutes as the clerk went through the list of required paperwork, where to apply for each, how much they cost, whom to bother with it – employer, tax authority, gyneacologist, local authority, repeat. Someone already even wrote a book about the rules and case studies and there’s a massive Facebook group for those who have either lost money or can’t seem to get anywhere with their application. All those energies not spent with something productive and to the purpose.
If these kind of arbitrary conditions rule your life it might be worth to step back and take a deep breath. For 30 thousand euros in loan and another 30 thousand in free money (spent on what they allow you to spend it) you sign away ten years of your life. In those ten years you could make better money perhaps.
To this date no living person managed to fit all the conditions – but many have invested in downpayments and building permits. In the meantime, property prices have risen and lives have been irreversibly changed.
<meta http-equiv=”refresh” content=”0; URL=/?_fb_noscript=1″ />No one appears to think in saving money, buying a property or planning their family based on actual needs and desires. When you are so grown to the state you don’t even believe it is possible.
*More conditions apply
Featured photo: Pereszlényi Erika