Surprising new trends that will revive the Hungarian housing market in 2025
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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.
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.
Constantly increasing house prices is not a good thing. Houses are homes and turning them into just assets is a mistake other countries have suffered the consequences.
One of those consequences is a decreased birth rate. Unaffordable housing is the leading issue for young families. Young people don’t want to be raising their children in a 1 room apartment or in their own childhood bedroom at their parents house. All the data, stats and surveys in countries like the US and UK point to this as the key reason young people are choosing not to have children. Throwing cash at this only increases house prices further and the only real solution is building and increasing supply at affordable prices, exclusively to only the young couples and families who need them.
A nice small family home with a little garden and garage should be achievable for every hard working young couple, whatever job they have, whether they work in the local shop or they are a lawyer. If this isn’t achievable, then birth rates will forever go down.