As house prices continue to reach record levels across much of Hungary, finding affordable accommodation is becoming increasingly difficult for young people, university students and workers. One possible answer may lie in expanding the country’s rental housing sector, which is expected to become a key element of Hungary’s housing policy in the coming years.
While rental housing forms an integral part of the housing system in many Western European countries, Hungary has never developed a significant state-backed or institutional rental sector. The market is dominated by private landlords, while the number of municipally owned flats has steadily declined since the fall of communism.
Rental housing largely disappeared after the regime change
Before the democratic transition of 1989–1990, a substantial share of Hungary’s housing stock was owned by the state or local councils, and rental housing played an important role in providing homes. During the 1990s, however, a large-scale privatisation programme allowed tenants to purchase their council flats at favourable prices. As a result, the number of publicly owned rental homes fell dramatically within just a few years.
Successive governments continued to prioritise home ownership. Housing subsidies, preferential mortgage schemes and family support programmes all aimed to help Hungarians buy their own homes rather than rent them.
The previous Orbán government also attempted to address growing housing challenges, but largely through measures designed to stimulate home purchases. Programmes such as Otthon Start and state-backed housing loans brought additional demand into the market, while housing supply struggled to keep pace.
According to a report by G7, average house prices rose by 23.5% in 2025. Even after adjusting for inflation, this represented a 19% increase, the largest annual rise seen on the Hungarian housing market in 25 years.
From Eurostat data, around 90% of Hungarians currently live in owner-occupied homes, one of the highest rates in the European Union.
At the same time, entering the property market has become increasingly difficult. Between 2015 and 2025, Hungary recorded the fastest increase in house prices anywhere in the EU. In Budapest and several major regional cities, the price of an average flat is now several times higher than it was a decade ago, while wage growth has failed to keep up.
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Budapest also faces its own challenges. Every year, thousands of students compete for a limited number of university dormitory places, while private rental costs continue to climb. A well-functioning rental housing system could therefore provide an alternative for many people, yet Hungary currently lacks the institutional rental market needed to meet this demand.
Research conducted by the Periféria Centre in 2022 found that around 300,000 adults in Budapest would be willing to live in rental housing on a long-term basis if suitable options were available. Within that group, approximately 100,000 people would also be financially capable of doing so. Since then, both property prices and rents have continued to rise, suggesting that demand for affordable and predictable rental housing has likely grown even further.
The Tisza government plans a new rental housing programme
The Tisza Party pledged during the election campaign to support both publicly owned and market-based rental housing developments. Since taking office, further details have emerged.
According to Minister for Transport and Construction Dávid Vitézy, EU recovery funds could be used to support the programme, which may generate between EUR 3 billion and EUR 5 billion worth of property development projects.
Under current plans, public funding would cover around one-fifth of development costs, while private investors would finance the remaining share. Budapest, Debrecen and Győr are among the cities expected to benefit, although other university towns and industrial centres could also be included.
Experts cited by G7 argue that building new homes alone will not be enough. Reforms to Hungary’s rental market regulations may also be necessary.
Among the proposals being discussed are longer-term tenancy agreements lasting between five and twenty years. Such arrangements could provide greater security for tenants while offering landlords more predictable conditions. Specialists have also suggested establishing an independent dispute resolution body based on Austrian models, allowing conflicts between landlords and tenants to be settled more quickly and at lower cost than through the current court system.
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A key question remains whether sufficient EU funding from the Recovery and Resilience Facility will become available and whether enough private capital can be attracted to complement it. If the plans move forward, Hungary could see one of its most significant housing initiatives in decades — one that may offer a genuine alternative to home ownership for those struggling to find affordable housing.
