Surprising new trends that will revive the Hungarian housing market in 2025

The Hungarian housing market is finally on track for a strong comeback next year after a couple of weak years. Key drivers include real wage growth, a lower base rate from the central bank and improving credit market conditions. Add to this some pre-election government measures and the stage seems set for a rebound.

The government has been rolling out various initiatives aimed at different parts of the housing market, but there is a catch: many of these focus on boosting demand rather than expanding supply. According to G7, there has been a lot of focus on the extension of the 5% tax on new buildings and the overhaul of the rental rules. Meanwhile, newer measures, like the Airbnb restrictions and youth-focused housing programs, are still lacking in detail.

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Rent control and housing benefits

The rental market, which usually plays second fiddle to homeownership policies, is now getting more attention. One pivotal move could be extending housing cafeteria benefits to include rent payments—something that could significantly shift renter support. Plus, discussions between the government and banks about capping housing loan interest rates are crucial, which will likely shape lending practices and impact housing demand.

With budget pressures looming large, the government seems keen to find low-cost solutions. Options such as the use of SZÉP cards and voluntary pension savings for housing fit the bill. On the other hand, any large-scale, ambitious improvements are likely to depend on the state of the public finances, which will influence when (and if) they’re announced.

Housing affordability & market trends

For the first time, affordable housing has become a talking point in government communications, which seems to be a major shift. Given the fluctuating house prices and stagnating real wages of recent decades, this acknowledgement feels long overdue. Statements from officials like Gergely Gulyás and Márton Nagy underline a real housing crisis, particularly in the capital and other big cities.

Post-pandemic, the housing market saw a dip, with sales picking up in 2023 but still trailing behind 2019 levels. House price indices are reflecting this pattern too: after a drop in 2022, prices crept back up in 2023 but are still hovering around the 2020-2021 real price levels. Rents are following a similar trajectory.

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Future outlook

Looking ahead, price trends may hinge on how much of the income from government bonds trickle into the real estate market. Even a partial inflow could spark notable price jumps, especially in major cities and for new builds. Forecasts are calling for potential price increases of 10-20% next year, buoyed by more active investors and continued support from home-buying subsidies.

All signs point to a housing market that’s gearing up for a major shift, fueled by a mix of economic recovery, targeted government measures, and evolving market conditions. While affordability remains a challenge and budget constraints may limit ambitious policies, the next year is set to bring new opportunities, especially for those keeping a close eye on investment trends and policy changes. If the expected wave of investor interest and supportive measures gain traction, the market could see a strong rebound, with rising prices in key urban areas leading the charge.

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