What will shape the real estate market in Hungary in 2026? Explained

Real estate market in Hungary: Colliers’ experts took a close look at the most important real estate market trends of 2025.

During the press conference, the company’s senior experts – Kristóf Tóth (Associate Director, Head of Research), Balázs Zelles-Görgey (Director, Head of Capital Markets), Miklós Ecsődi (Director, Head of Occupier Services), Anita Csörgő (Director, Head of Retail), and Tamás Beck (Director, Head of Industrial) – provided an overview of the current macroeconomic environment and investment trends, while also delivering an in-depth analysis of developments in the office, retail, and industrial real estate markets.

Macroeconomic Outlook for 2026: After a Slow Year, Could Acceleration Follow?

The Hungarian economy underperformed expectations in 2025; however, rising consumption and increased investment activity could provide a solid starting point for growth in 2026. At the same time, the economy continues to navigate an environment marked by international market uncertainty and heightened geopolitical risks, Kristóf Tóth pointed out.

Weak Growth, Tight Labour Market

According to Colliers’ Head of Research, Hungary’s GDP growth reached only around 0.4% in 2025, clearly falling short of previous expectations. Despite the economic slowdown, the labour market remained tight: the unemployment rate stood at 4.4% in December 2025, while net nominal wages increased by 9.4% during the first eleven months of the year. Key drivers of economic growth in 2026 may include rising real wages, strengthening consumption, and the positive impact of investments on the economy.

Inflation: A Downward Trend, but Not Without Risks

The inflationary environment improved significantly by the end of 2025. In 2026, inflation is expected to range between 3.0% and 3.5%; however, new risks may emerge, particularly related to energy prices and exchange rate volatility. Monetary conditions have already begun to ease: in the eurozone, the key policy rate has been reduced to 2.15%, lowering the cost of euro-denominated financing. A decline in interest rates is also expected in Hungary, Kristóf Tóth noted.

Energy and Industry: The Key Risk Factors

Macroeconomic prospects are significantly influenced by developments in the energy and industrial sectors. Although European natural gas prices fluctuated around EUR 39/MWh in early 2026, the EU is increasingly dependent on LNG imports, while gas storage levels remain lower than in the previous year. Industrial production declined by 3.5% during the first eleven months of 2025, with electrical equipment manufacturing down by 12.3% and vehicle production decreasing by 4.5%. Several new projects are expected to drive a potential turnaround (e.g. BYD, BMW, CATL). However, despite substantial industrial investments, uncertainty in global demand and geopolitical risks continue to weigh on the outlook.

The construction sector grew by 1.6% during the first eleven months of 2025, primarily driven by residential developments. At the same time, volatility in public investments continued to play a decisive role in monthly output levels. Growth in construction producer prices was largely influenced by the EUR/HUF exchange rate and rising wages.

As we wrote earlier about Budapest’s living costs soar: Affordable rents don’t mean easy life for residents

Turning Point in the Hungarian Investment Market: Past the Bottom

The real estate investment market was presented by Balázs Zelles-Görgey (Director, Head of Capital Markets), who emphasized that the previous year marked a genuine turning point. Following a record-low and volatile year in 2024, total investment volume in 2025 reached EUR 881 million, representing a 117.5% year-on-year increase.

Domestic investors continued to dominate the market, accounting for approximately 64% of total volume. International investors remained cautious, driven by a combination of global, regional, and local factors. Hungary currently carries a higher country risk premium compared to its regional peers. Western European core investors are still primarily present on the sell side across the entire CEE region.

For both domestic and international investors, it would be crucial if elevated 10-year government bond yields – serving as a “risk-free” benchmark – translated into higher commercial real estate yields and lower capital values. An unusual phenomenon observed last year was that prime yields generated a negative yield spread compared to the 6.94% yield on 10-year government bonds. This situation has since normalized, as the 10-year government bond yield declined to 6.5%.

Balázs Zelles-Görgey noted that market depth remains limited, with some opportunities attracting only one or two active bidders. In 2025, the majority of transactions were concentrated in three sectors: offices (50.8%), hotels (18.3%), and industrial assets (17.4%).

Prime yields across major asset classes remained flat last year, and no compression is expected in 2026. Over the longer term (post-2026), modest yield compression may occur, supported by further interest rate cuts and improving investor activity; however, the outlook remains subject to considerable uncertainty.

Positive signals are emerging in certain CEE countries, particularly Poland and the Czech Republic, where annual transaction volumes approached EUR 4.5 billion in 2024. In the Czech Republic, domestic investors and funds dominate the market, while in Poland a local investor base is only now beginning to form. Approximately 85–90% of buyers remain foreign, primarily regional investors, including Hungarians. According to Colliers’ capital markets team, cross-border regional investments are expected to continue dominating the CEE region in 2026. This trend could lead to stronger capital inflows into Hungary later in the year, provided the situation surrounding EU funds is resolved and the economic environment improves.

Core-plus and defensive income strategies may come to the forefront, such as grocery retail, prime logistics assets with long lease terms, and high-quality offices with strong tenant covenants. Secondary assets (particularly offices) may continue to offer attractive yields, while conversion and repurposing activity is expected to intensify. In Budapest, well-located office buildings may increasingly be converted into residential or accommodation uses. Far Eastern companies are expected to remain active in the logistics and industrial segment, primarily as owner-occupiers.

Retail: Rising Real Incomes and Tourism Could Provide Support

In her market overview, Anita Csörgő (Director, Head of Retail) highlighted that rising real incomes and growing international tourism have had a positive impact on retail turnover.

Retail Market in Numbers

Between January and November 2025, alongside a 4.9% increase in real wages, total retail turnover volume rose by 2.6%. Growth in the clothing and footwear segment lagged behind the average (1.5%), while health and beauty products and e-commerce were the main growth drivers (5.9% and 7.6%, respectively). Purchasing power per capita increased to EUR 12,323 in 2025, representing a 6.5% year-on-year rise and exceeding average inflation of 4.4%, partly due to a stronger EUR/HUF exchange rate.

International tourism supported retail spending, particularly in downtown high street locations. Notably, the number of international guest nights increased by 7.5% year-on-year in 2025.

High Street Retail

Prime high street rents increased significantly in 2025 due to strong demand, particularly on Váci Street and Fashion Street, where average rents for 100–200 sqm units reached EUR 160/sqm/month, and in some cases as high as EUR 200/sqm/month. This represents a 20% increase compared to the 2023–2024 period.

Ten new lease agreements were signed on Andrássy Avenue, most of which are scheduled to open by summer 2026 (including Samsonite flagship store, Missoni, Longines, WKruk, Massika, a relocating MaxMara, and two luxury multi-brand stores). Vacancy rates declined further, pointing to continued rental growth. Tenants are increasingly proactive in extending leases, often 2–3 years ahead of expiry.

Following an exceptionally strong 2024, F&B activity moderated in 2025, with operators focusing primarily on efficiency improvements. Strong demand remains for drive-thru fast-food units (KFC, Burger King, Starbucks, Simon’s Burger, Bellozzo, Popeye’s). Vacancy rates are also decreasing on secondary high streets (Grand Boulevard and streets surrounding Váci Street), where service-oriented tenants, sportswear brands, and discount fashion retailers are expanding. However, the impact of Airbnb regulation on hospitality operators in Districts VI–VII remains uncertain.

Retail Parks

Amendments to the Plaza Stop regulation in September 2025 created significant uncertainty in the retail park market, leading to the suspension of several developments until the 2026 parliamentary elections. Despite this, retail parks remain in demand, particularly among discount and grocery chains, FMCG brands, and healthcare and fitness providers.

Margin caps and special sectoral taxes complicate business planning, resulting in lower achievable rents and increased landlord concessions. Only one retail park opened in 2025 (Dera Park, Szentendre), while four new developments are expected outside Budapest in 2026–2027. Residential developments supported by the OtthonStart programme may further boost demand for retail parks in suburban areas.

Key advantages of retail parks remain their lower rental and operating costs, lower construction costs, cost-efficient operations, and resilience during economic downturns.

Shopping Centres

At the end of 2025, the 11,000 sqm Zenit Corso opened in Zugló, operating more as a neighbourhood centre. The Time Out Market F&B concept successfully opened in the renovated Corvin Palace at the end of 2025. No major new developments are currently in the pipeline, with the exception of the complete redevelopment of Duna Plaza, expected around 2029, albeit surrounded by considerable uncertainty.

Food court refurbishments are ongoing in several existing shopping centres, while renovation and repositioning of older schemes continue. Retail turnover stagnated in 2025, placing pressure on rents, while rising labour and energy costs continue to erode retailer profitability.

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Office Market: Declining Vacancy and Reviving Demand

Miklós Ecsődi (Director, Head of Occupier Services) emphasized that declining vacancy rates and strengthening demand characterised the office market in 2025.

The positive shift in the Budapest office market was reflected in falling vacancy rates, alongside increasing net absorption and net take-up. Total office stock currently stands at 4.46 million sqm, while the average vacancy rate declined to 12.5%. Vacancy in the pure speculative office stock is currently 15.9%.

Net take-up exceeded 217,000 sqm in 2025, representing more than a 14% increase year-on-year. Demand growth primarily focused on higher-quality, green-certified buildings in favourable locations.

Rents remained broadly stable: prime rents stand at EUR 25.5/sqm/month, while average rents for Class A buildings are EUR 17.1/sqm/month.

Supply remains constrained, with limited speculative development planned through 2028, supporting market balance in the medium term. According to Colliers, the office market in 2026 will continue to be shaped by quality-driven demand, restricted new supply, and cautious tenant decision-making.

Vacancy rates are therefore on a downward trajectory, while net demand and net absorption increased year-on-year. Below-average speculative vacancy is observed in the following submarkets and categories: CBD, Central Buda, North Buda, South Buda, Váci Corridor, green-certified buildings, Class A offices, and buildings younger than 10 years.

Total speculative office completions in 2024–2025 amounted to 80,730 sqm, of which 26,029 sqm (32.2%) remained vacant at the end of 2025.

Total transaction volume in Budapest increased by 0.7% year-on-year in 2025, driven primarily by owner-occupied transactions in the public sector (Dürer Park). Net take-up accounted for 43% of total demand, 5 percentage points higher than in 2024.

The speculative office pipeline remains extremely limited, totalling 138,900 sqm, of which 47,906 sqm is expected to be delivered by the end of 2026. Risk aversion is clearly reflected in the fact that 89% of developments are concentrated along the Váci Road office corridor.

Industrial Real Estate Market in Hungary: Nearly Half of Leasing Activity Took Place in Q4

The final quarter of 2025 crowned an otherwise strong year. Exceptionally high leasing activity was recorded during this period, with 45% of annual net take-up realised in Q4, highlighted Tamás Beck (Director, Head of Industrial).

From this perspective, the overall strength of demand in the Hungarian industrial and logistics real estate market in 2025 becomes even more notable. Net take-up increased significantly nationwide, while new completions pushed vacancy rates higher in Budapest. Total industrial-logistics stock in Budapest exceeded 4 million sqm, while net take-up rose to nearly 448,000 sqm.

Total I&L stock currently stands at 4.082 million sqm in Budapest and 2.050 million sqm in regional markets. Overall vacancy rates are 12.8% in Budapest and 8.6% in regional locations, representing increases of nearly 5 and 2 percentage points, respectively, compared to the end of the previous year.

In 2025, twelve new leasing transactions exceeding 10,000 sqm each were concluded in Budapest, totalling 238,160 sqm. 

Tamás Beck also noted that while domestic industrial investments have largely focused on the automotive sector over recent decades, expectations that supplier ecosystems would generate several hundred thousand square metres of additional demand have not fully materialised. Many manufacturers have opted for just-in-time logistics solutions with rapid turnaround times or have integrated suppliers directly into their production sites. As a result, the anticipated speculative demand has either not emerged or has only partially materialised around automotive plants.

Total industrial completions reached exactly 476,794 sqm in 2025, with 37% delivered vacant. Of this volume, 69% was completed in Budapest and 31% in regional markets. Only 10.5% of regional completions occurred in Western Hungary. In a north–south context, industrial-logistics developments were concentrated in the northern part of the country (north of the M7 and M3 motorways), while in an east–west comparison relative to the Danube, a significant share of developments took place in Eastern Hungary.

The total known development pipeline amounts to 551,458 sqm, of which 43% is pre-let (Budapest: 300,681 sqm with 53% pre-let; regional markets: 250,777 sqm with 60% pre-let). The pipeline is dominated by big-box developments, with a smaller share of urban logistics and small-unit projects.

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FAQ: The Real Estate Market in Hungary in 2026, Explained