Here’s what to expect from Budapest’s real estate market in 2025

Hungary’s real estate market is poised for significant growth. This surge is anticipated to be driven by a tremendous influx of HUF billions from government bonds and pension savings, predominantly impacting properties in Budapest and major towns.

Real estate prices to face a sharp rise in 2025

As Telex reports, Hungary’s real estate market is set to experience a sharp rise in house prices, with an expected increase of 10-15% in 2024, according to an analysis by Ingatlan.com. This surge, driven by government bonds and pension savings potentially adding over HUF 1,000 billion (approximately EUR 2.5 million) to the market, will mainly impact properties in Budapest and major cities. Although Hungarian real estate saw significant depreciation in 2023 and early 2024, the forecasted price rise would represent a strong recovery, especially with inflation projected to remain low next year.

Source: depositphotos.com

Never-ending price hike?

Hungary’s real estate market continues to see notable price increases, with house prices rising by 6.5% in August and 6.7% in September compared to last year, according to Ingatlan.com’s house price index. The rise, however, has been uneven across regions. Budapest experienced a significant 9.1% increase, while the northern Great Plain, including the industrial hub Debrecen, saw an 8% rise. In contrast, northern Hungary recorded only a 1.8% increase, highlighting regional disparities in the real estate market. In Budapest, the average price per square metre reached HUF 1.07 million, with the 5th district being the most expensive at HUF 1.73 million, while the lowest-priced areas include the 20th district and Salgótarján.

Government bonds and pension savings

Looking ahead, the market is expected to accelerate further as an additional HUF 1,000 billion (approximately EUR 2.5 million) could enter the housing market by 2025, driven by pension savings and government bonds. This potential windfall, equivalent to a significant portion of the annual market turnover, will likely focus on properties in Budapest and larger cities, boosting demand and further driving up real estate prices. With the Hungarian state set to pay out substantial sums to government bondholders in the coming years, many investors plan to reinvest their returns into the property market, potentially fuelling further growth in house prices.

Hungary’s real estate market could see further growth following a recent government amendment allowing savings from voluntary pension funds to be used for housing purchases. While details are yet to be clarified, this policy may drive up house prices. A government policy paper also highlights the challenges young people face in acquiring homes, suggesting future measures to boost house-buying and construction. However, potential regulations like stricter Airbnb rules or rent caps could temper price rises driven by investors. According to Ingatlan.com, at least 145,000 sales are expected in 2025, with house prices forecasted to increase by over 10-15% next year.

Photo: depositphotos.com

Read also:

• Latest inflation data out: Hungarian inflation back on target, property prices keep increasing
• Hungarian housing market: Buyer demand reaches 2-year high