Demand in Hungary’s residential property market has remained subdued this year, with overall transaction volumes declining. However, the market for above-average-priced homes has followed a different trajectory.
Transactions of properties above HUF 100 million increase despite weaker overall market
According to an analysis by Duna House, the total number of property transactions fell by around 7% compared with the same period last year, while sales of properties worth more than HUF 100 million (appr. EUR 276,000) rose by 18%.
Their share of all transactions increased from 8% to more than 10%. This growth, however, has not been driven by the premium segment: transaction volumes for genuine premium properties worth more than HUF 300 million (around EUR 828,000) have remained unchanged, while activity in the highest price bracket has declined.
Inflation has redefined what counts as an expensive property
Rising property prices have also reshaped what is considered expensive. The median selling price of properties sold by Duna House reached around HUF 50 million (EUR 138,000) in the first half of this year, up from HUF 42 million (EUR 116,000) a year earlier.
Against this backdrop, the HUF 100 million threshold no longer represents the premium market, but rather roughly the top 10% of the market by value – a segment best described as above-average-priced properties. It only becomes meaningful to speak of the premium segment above HUF 300 million, where the market operates according to a distinct set of dynamics.
Strong upper-middle-class demand and rising prices drive growth
The expansion in sales of above-average-priced properties is driven by two factors. Firstly, there is genuine demand, as upper-middle-class buyers remain active in the housing market. Secondly, there is a technical effect: as property prices have risen across the board, an increasing number of transactions now exceed the HUF 100 million threshold.
By contrast, the genuine premium segment – properties valued above HUF 300 million – has not expanded over the past six months. “The market for above-average-priced, but not yet premium, properties is performing differently because it is driven by a different type of demand than the broader market,” said Péter Szegő, Chief Analyst at Duna House.
“The Otthon Start scheme has stimulated demand below its eligibility limits – HUF 100 million for flats and HUF 150 million (EUR 414,000) for detached houses – and in doing so has pushed the overall price level higher. Rather than diverting demand away from more expensive properties, the subsidised mortgage has boosted activity below the threshold, indirectly lifting more transactions above the HUF 100 million mark. The premium segment, on the other hand, is driven not by subsidised lending but by financially strong buyers, who are typically moving into larger, higher-value homes.”
Financing differs in the higher-end market
Financing in the above-average-priced segment also differs from that of the wider market. Since flats priced above HUF 100 million and single-family homes above HUF 150 million are not eligible for the Otthon Start scheme, buyers in this segment generally finance purchases with their own capital, often supplemented by market-rate mortgage loans.
“In this segment, mortgage financing often plays a supporting role rather than acting as the primary driver of a transaction,” said Krisztián Fülöp, Head of Credipass Hungary.
“For these buyers, a market-rate mortgage is not necessarily a prerequisite for purchasing a property, but rather a tool for optimising the financing structure. Because they typically provide a larger down payment, changes in mortgage interest rates have a much smaller impact on transaction activity than they do for buyers relying on subsidised loans.”
Budapest and Pest county still dominates
Geographically, the market for above-average-priced properties remains highly concentrated, with four out of five transactions taking place in Budapest and Pest County. Compared with last year, however, the capital’s share has declined, while Pest County’s has increased.
Demand is increasingly shifting towards the Budapest metropolitan area, where Érd recorded a similar number of transactions to the strongest-performing districts of the capital. Outside the Budapest region, Debrecen and Pécs stand out as the leading markets.
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The premium and luxury market operates by different rules
The top end of the market – premium and luxury properties – continues to operate very differently from the mass market.
“Every property worth more than HUF 300 million is unique, which means every transaction is unique as well,” said Tamás Viola, Head of Duna House Prime. “This is not a mass market; success depends on matching the right buyer with the right property.
Pricing itself requires specialist expertise. No two properties are the same, and determining a realistic asking price demands considerable experience. Setting the wrong price can easily add several months to the sales process.”
Read also: Quiet wealth — why Budapest’s finest homes change hands behind closed doors?
