Developing new institutions of housing financialization on the European semiperiphery

In Hungary a model of dependent housing financialization developed during the credit boom of the early 2000s based primarily on the rapid spread of individual mortgages denominated in foreign currencies. Following the crisis... [ view full abstract ]

In Hungary a model of dependent housing financialization developed during the credit boom of the early 2000s based primarily on the rapid spread of individual mortgages denominated in foreign currencies. Following the crisis the housing market froze completely, shedding light on how this specific form of housing financialization – characteristic of European peripheries – was inherently dependent on capital flows from core European economies. Currently, the renewed interest for financial investment in housing can strongly be felt on the Hungarian housing market as well. However, the circle of actors channeling this investment has changed partially as a consequence of government policies aiming to reduce (or at least diversify) the external capital dependency of the country and to support the ascendance of a national capitalist class. The current macroeconomic context and the repercussions of previous overinclusive mortgage lending produce space for the development of new forms (and also new sources – geographically and institutionally) of capital investment in housing. These new forms, such as specifically residential real estate-backed investment funds or development-for-rental are important new tendencies on a housing market with over 90% owner occupancy. New sources include an increased interest from investors coming from outside the EU as well as nationally based institutional investors. After a discussion of these shifts of context, I will present the case study of the largest Hungarian real estate agent (now upscaling to a regional market with acquisitions in Poland and the Czech Republic), which is a forerunner in the development of new instruments linking residential real estate and finance. I argue that the strategies developed by this company are important indicators of broader tendencies at work on the Hungarian housing market, and thus also give hints about possible future developments.