Hungary’s housing market may be approaching one of its most important policy shifts in years. A newly published government resolution orders the preparation of the Wekerle Housing Construction Programme, promising more affordable homes, rental housing and student accommodation, with brownfield redevelopment at the centre of the strategy. Yet the plan also raises a fundamental question: can Hungary build its way out of the housing crisis through huge new urban districts, or could the infrastructure bill swallow much of the money before the first flats are completed?
The distinction is important. The government has not yet approved a detailed construction programme with a final list of projects, prices and eligibility rules. Government Resolution 1275/2026, published in the Hungarian Gazette on 31 August, instructs the minister for transport and investment, together with the finance minister, to prepare the Wekerle programme by 30 September.
Nevertheless, the political direction is already clear: after years in which Hungarian housing policy was dominated by measures encouraging home ownership, the state is preparing to give a much larger role to rental housing, institutional investors and publicly supported construction.
Why the Hungary’s housing market has become a political problem
The starting point is deteriorating affordability.
According to figures presented by Transport and Investment Minister Dávid Vitézy, an average Hungarian home was equivalent to around 5.9 years of average net earnings in 2015. By 2025, the figure had risen to 7.1 years.
Over roughly the same period, Vitézy said inflation-adjusted house prices increased by around 120%, while real wages rose by about 60%. Real rents, meanwhile, climbed by around 30%.
The situation is particularly difficult for people who cannot or do not want to buy.
Research cited by Economx estimates that Hungary faces a shortage of roughly 100,000 homes in areas where affordable housing and labour mobility are increasingly important. In Budapest, researchers found a substantial gap between rents that many households regard as affordable and actual market prices. ()
Students face another version of the same problem. According to the figures presented by the minister, approximately 320,000 university students compete for just 49,000 dormitory places nationwide. Those who cannot secure accommodation are pushed towards the private rental sector, adding demand particularly in university cities.
Construction has also been weak.
According to the Hungarian Central Statistical Office (KSH), only 12,062 new dwellings were completed in 2025, 9.3% fewer than the previous year. That compares with around 28,000 new homes at the recent peak in 2020.
There is, however, an important sign of improvement: 6,278 new homes were completed in the first half of 2026, 22% more than during the same period of 2025, KSH said. The number of homes covered by new permits and simplified notifications also rose by 29%, to 16,588. The Hungarian housing market is therefore recovering from a very low base, rather than continuing to contract uninterruptedly.
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What the Wekerle programme would change
The government resolution makes brownfield redevelopment one of the programme’s priorities.
It also calls for increasing the proportion of affordable housing, developing institutional rental housing and student accommodation, simplifying planning and approval procedures, improving transport connections, encouraging energy-efficient construction and attracting long-term institutional investors.
The resolution goes further than construction alone. Ministers must examine tax measures that could expand housing and dormitory supply, while a new system of financial and regulatory incentives for affordable rental housing is due by the end of 2026.
Perhaps most significantly, the government has also ordered the preparation of a regulatory concept for a state housing agency, with a deadline of 31 December.
Separate government announcements have provided an indication of the potential financial scale.
The government says EUR 550 million could be drawn from EU Recovery and Resilience Facility resources. With bank and private-sector co-financing, the investment volume could exceed EUR 2 billion, while potential European Investment Bank participation could eventually push the total towards EUR 3 billion.
Large underused or former industrial areas are expected to play a major role. Vitézy has mentioned sites such as Rákosrendező and the planned Diákváros, or Student City, in Budapest as examples of the type of development being considered.
The stated ambition is to make quality rental housing available to young people for around HUF 130,000–180,000 (approximately EUR 352–487) per month, Portfolio.hu said.
That would be highly competitive by current Budapest standards.
However, neither these rental prices nor specific sites such as Rákosrendező are written into the 31 August government resolution. They should therefore be understood as policy ambitions under discussion rather than guaranteed features of the final programme.
Brownfield development could transform Budapest – but at what price?
On paper, the logic of brownfield construction is compelling.
Instead of expanding cities further into green areas, governments can turn abandoned railway yards, factories and industrial zones into new neighbourhoods. Large contiguous plots can also make it easier to construct thousands of homes together with schools, parks, shops and public transport.
There is another advantage: a successful brownfield project can repair parts of the urban fabric that have been neglected for decades.
But this is also where the greatest financial risk emerges.
Former industrial and railway land can require extensive soil remediation. Heavy metals, oil pollution and other contamination may have to be removed before residential construction begins. Roads, sewage systems, water and electricity networks, schools, health services and public transport may all need to be built almost from scratch.
Urban development consultant János Dienes, a former chief architect of Budapest’s Zugló district, has warned that the infrastructure bill for a hypothetical new district containing around 10,000 homes could reach HUF 700 billion (approximately EUR 1.90 billion).
According to his estimate, constructing the homes themselves could cost another HUF 760 billion (around EUR 2.06 billion).
Those figures are estimates, not an official budget, and the cost of individual brownfield sites could vary dramatically.
Yet they illustrate the problem facing policymakers. In this scenario, land preparation and infrastructure alone would cost more than three times the EUR 550 million of EU funding currently identified for the Wekerle programme.
A project can therefore create thousands of nominally affordable homes while still becoming extremely expensive for the state if taxpayers effectively finance the land, remediation, transport infrastructure and the difference between construction costs and subsidised rents.
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Would filling gaps in existing neighbourhoods be cheaper?
Critics of the mega-project approach argue that Budapest already contains numerous vacant or underused plots in established neighbourhoods.
Developing these so-called infill sites would offer a different model.
Many are already surrounded by roads, public transport, electricity, water, schools, shops and healthcare. Instead of creating an entirely new urban district, housing could be inserted gradually into the existing city.
This has a social argument as well as a financial one.
If thousands of subsidised rental properties are concentrated in one isolated location, policymakers must prevent the new development from becoming a segregated rental-housing estate. Distributing affordable homes across existing neighbourhoods could produce a more mixed urban environment.
But infill development also has limitations.
Plots are smaller and ownership is fragmented. Land in established neighbourhoods can be expensive, while local opposition to new construction can slow development. It is much harder to deliver 10,000 homes through dozens or hundreds of small projects than on one large site under coordinated ownership.
The real choice, therefore, may not be brownfield or infill construction.
A successful programme could require both: large strategic urban regeneration projects where the economics make sense, alongside smaller developments that exploit existing infrastructure.
Building new homes is not the only option
Supply is only one part of the housing equation.
Budapest has already experimented with restrictions on short-term accommodation. From 1 January 2025 until 31 December 2026, no new private or other short-term accommodation units can be registered in the capital. Existing properly registered operators are generally exempt from the moratorium.
District VI, Terézváros, has gone considerably further by effectively reducing the permitted number of days for private short-term accommodation to zero from 2026.
Further restrictions on Airbnb-type accommodation could theoretically return some properties to the long-term rental market, although the size of that effect is uncertain and stronger regulation would also have consequences for tourism and property owners.
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Another frequently discussed tool is taxation of persistently vacant investment properties. The theory is straightforward: instead of waiting years for new construction, governments can try to bring existing but unused housing stock back into circulation.
However, such measures raise their own questions, including how a genuinely vacant property should be defined, how exemptions should work and how the rules could be enforced.
The Wekerle resolution itself leaves the door open to tax-policy measures, but it does not yet specify what those measures will be.
Why it matters for foreigners in Hungary
The debate over the Hungarian housing market is not only a domestic social-policy issue.
For foreigners living, studying, working or investing in Hungary, the Wekerle programme could eventually change several parts of the Budapest property market.
International students could feel the effects first. If Hungary creates substantially more dormitory places, thousands of students who currently rent privately may leave the open market. That could reduce competition for smaller Budapest flats, particularly during the traditional late-summer university rental rush.
Foreign students should not, however, assume that the planned subsidised rental properties will automatically be available to them. Eligibility rules have not yet been published.
Foreign professionals and expatriates renting in Budapest could also benefit indirectly. Even if publicly supported apartments are reserved primarily for Hungarian residents or younger households, additional supply at the lower and middle end of the market could reduce pressure elsewhere in the rental chain.
Property investors face a more complex picture. A stronger institutional rental sector would create a new competitor to Hungary’s overwhelmingly private rental market. At the same time, the government’s explicit intention to attract long-term institutional capital could create investment opportunities in professionally managed residential developments.
Short-term rental investors must also consider the separate regulatory trend towards tighter Airbnb rules in Budapest.
Finally, large brownfield projects could change the geography of the capital itself. Rákosrendező and similar areas are not simply housing sites. If developed successfully, they could become entirely new urban neighbourhoods with transport links, retail, services and public spaces, affecting property values far beyond the boundaries of the projects.
The Hungarian housing market now faces a question of execution
The direction of policy has clearly changed. Hungary’s government is acknowledging that increasing purchasing power through subsidised mortgages alone cannot solve a housing shortage if the physical supply of homes remains constrained.
The Wekerle programme therefore represents something potentially more significant: a move towards construction, rental housing, dormitories, institutional investment and a more active state role in the housing market.
But the hardest decisions have not yet been made.
The programme must still determine who receives subsidised housing, how low rents will be financed over the long term, how much public money will be spent per completed home, who will own and maintain the properties, and how risks will be divided between taxpayers, banks, developers and institutional investors.
Above all, the government will have to demonstrate that its preferred brownfield projects offer value for money.
The first important deadline is 30 September 2026, when the Wekerle Housing Construction Programme is due to be prepared. A review of major housing investments follows in October, while proposals for affordable rental financing and the state housing agency are due by the end of December.
Until those details are available, the Wekerle programme should be viewed neither as a guaranteed rescue of the Hungarian housing market nor as an inevitable financial failure.
Its ambitions address real weaknesses: too few homes, expensive rents, inadequate student accommodation and a rental sector with little institutional depth. The decisive question is whether Hungary can translate those ambitions into homes at a cost that makes them genuinely affordable – not only for their tenants, but for the public finances as well.
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