Waiting could prove costly in the Budapest property market as the capital faces significant price rises

The Hungarian property market is experiencing a significant surge, with experts predicting substantial price increases, especially in Budapest. Several new economic policies and market conditions are contributing to this trend, leading to heightened demand and a shrinking supply of available properties.

Economic policies fuelling demand

In October 2024, Hungary’s economy ministry proposed a one-off measure allowing private pension savings to be used tax-free for housing purposes in 2025, Reuters reported back in October. This initiative aims to stimulate the economy ahead of the 2026 parliamentary election. Over one million private pension fund members, with average savings of HUF 2 million (EUR 5,000) each, could potentially channel HUF 300 billion (EUR 750 million) into the housing market. Combined with interest payments from inflation-linked government bonds, the total market impact could reach HUF 1 trillion (EUR 2.5 billion), potentially boosting housing prices by 10-15% in major cities and Budapest.

Additionally, the government has expanded tax-free employer-provided housing benefits and introduced a home renovation program in small municipalities, Növekedés reports. These measures, along with favorable loan opportunities, are expected to further stimulate the housing market.

Rising demand and shrinking supply

The real estate platform ingatlan.com reported a 38% increase in property inquiries in 2024 compared to the previous year. January 2025 saw an additional 46% surge in interest. Notably, demand for apartments doubled, while interest in houses rose by 33%. Budapest’s XIII, XIV, and XI districts remain highly sought after, with outer districts also experiencing increased interest. In rural areas, Pest, Hajdú-Bihar, and Borsod-Abaúj-Zemplén counties lead in demand, with Baranya, Tolna, and Győr-Moson-Sopron counties showing the most significant growth in early 2025.

However, the supply of available properties is not keeping pace with this burgeoning demand. Between November 2024 and February 2025, the number of available houses nationwide decreased by 10%, and apartments by 15%. In Budapest, the supply of available apartments dropped by nearly 25%.

Price escalation

As of February 2025, Budapest has seen a 15% year-over-year increase in property prices, with rural areas experiencing a 13% rise. Experts anticipate a nationwide price hike of 10-15% for the entire year, with Budapest potentially witnessing increases up to 20%. Panel apartments have experienced the most significant appreciation, with prices rising over 20%, while brick-built apartments saw a 13-15% increase, and single-family homes around 9-10%.

Despite the rapid price growth, experts advise against concerns of a housing bubble. From 2014 to 2022, the Hungarian housing market experienced consistent double-digit price increases, positioning it among Europe’s top markets. The subsequent price correction in 2022-2023 was moderate, and the current demand-driven price surge aligns with market expectations, Dávid Valkó said.

In summary, Hungary’s housing market is undergoing a dynamic phase, propelled by favorable economic policies and robust demand. Prospective buyers, especially in Budapest, may need to act promptly to navigate the rapidly evolving market conditions.

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