The government raised the house purchase quota for the national asset manager (NET) with a decree in the official gazette, the news portal Napi reported yesterday. NET was set up to support troubled forex mortgage borrowers by purchasing homes of borrowers threatened by eviction and leasing them back at preferential rates. Its quota has been raised on several occasions and the latest decision set it at 36,000 housing units, up from the previous 35,000 limit. The quota is valid by the end of 2018. The government’s decision followed media reports that the NET quota has been almost exhausted while there were still forex borrowers who needed assistance.
The economy and development ministries were required to find financing for the increased NET quota next year, according to the decision. The necessary budget spending is not included in the draft 2018 budget but we think that its impact will be small – around HUF4-5bn according to our calculations. It should be easily accommodated by existing budget reserves or other means, in our view.
According to earlier information, total NET spending on home purchases amounted to HUF107.5bn since it was established in Jan 2012 by end-2016. The purchases cancelled HUF246.5bn of mortgage loans, which the banks recovered at a discount from NET.