Dream homes turned gas-guzzlers, Hungary’s ‘Kadar cubes’ losing allure

By Gergely Szakacs

APC, Hungary (Reuters) – Facing a surge in heating costs, Andrea Varga is desperately trying to sell the communist-era house she can no longer afford, but with Hungary’s economy slowing and many facing the same predicament, there has been little interest.

The single mother moved into her so-called Kadar cube, almost identical square-shaped houses built under communist leader Janos Kadar’s rule, with her late partner three years ago. The properties are a ubiquitous feature of the Hungarian countryside, with hundreds of thousands dotting the landscape.

But many are now coming to market as the surge in energy prices due to the war in Ukraine and Western sanctions on Russia impose prohibitive heating costs on owners.

A survey in 2021, conducted by the Hungarian unit of roofing company BMI Group, showed just a tenth of the houses in villages like Apc, 72 kms (45 miles) northeast of Budapest, where Varga, 51, lives with her handicapped daughter, have been modernised.

“No one has called since we listed the house for sale,” she said, as she sat by a wood-fired stove which heats the living room and a bedroom to curb gas bills she has struggled with since the death of her husband two years ago.

A move by nationalist Prime Minister Viktor Orban to curtail a years-long cap on household utility bills has exacerbated the cost-of-living crisis in the central European country, which still relies on Russia for most of its energy.

The utility reforms and surging food prices pushed Hungarian inflation to 21.1% in October, the highest in central Europe, with gas prices more than doubling and firewood prices rising by nearly 60% from a year ago. Food prices rose by 40%.

“I bought some firewood before the prices went up, that’s what we use now,” Varga said. “After that, I don’t know what’s next. We will either have something to eat, or watch the sky.”

Hungary and Slovakia are the most reliant on imported energy in central Europe, based on a survey by S&P Global (NYSE:) Ratings, with Hungary’s gas dependency the highest in the region.

THE HARDEST WINTER

Listings of used family houses for sale have increased dramatically in recent months in dozens of small towns and villages across Hungary, according to data by real estate portal ingatlan.com.

However, demand is falling as the economy is headed into a technical recession and double-digit borrowing costs stifle lending. Real estate agent Duna House said outdated, energy-guzzling houses were increasingly difficult to sell.

Terez Toth, 84, who has lived in a square house in the village of Hered for decades, expects the coming winter to be the hardest for her since Orban took power in a 2010 landslide on a pledge to stamp out unemployment and raise living standards.

“We are anxious. I do the math every day. I cannot even tell you how many sheets of paper I have filled with calculations on how I end up better, how I can save more,” said Toth, who wears a coat indoors and turns the heating down on milder days.

After 35 years in a textile factory, she spends her retirement tallying cubic metres and kilowatt hours of energy used to remain within the confines of the subsidised household bracket.

“You have many sleepless nights, contemplating what’s next,” she said.

($1 = 392.04 forints)

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