housing

Budapest’s real estate might be on the verge of a renaissance – Here’s what’s driving it!

Spontaneous euroisation Budapest rent prices property market prices exceeded property in hungary renting in Hungary rental

The emergence of new housing real estates now goes beyond the tight clustering of simple residential buildings. New projects aim not only to develop real estate, but to create complex neighbourhoods offering parks, services and green spaces. Such developments make residential environments more attractive, providing a range of community and leisure facilities in addition to homes.

Behind the evolution of urban living environments is a shift in consumer expectations. According to Pénzcentrum.hu, buyers are placing increasing emphasis not only on the quality of housing, but also on the infrastructure of the area and the accessibility of services. The noise and stresses of metropolitan life are also increasing the demand for green spaces and tranquil surroundings. Recognising this, new residential areas are seeking to provide not only luxury but also comfortable living conditions.

Developers are placing increasing emphasis on community and green solutions in the design of modern neighbourhoods. By integrating public parks, community spaces and services, they are creating liveable urban environments where residents can enjoy an active community life. In addition, developments are built with sustainability in mind, using energy-efficient and environmentally friendly solutions to help reduce the city’s environmental impact.

Hungarian real estate market Budapest Hungary — Source: Pixabay

The real estate situation in Budapest

Although Budapest has a growing housing stock, this is not enough to meet the ever-increasing demand. Obstacles to the expansion of the capital’s housing market include a lack of suitable building plots and regulatory difficulties. The expansion of agglomeration areas is also not a sustainable solution and developers need to consider alternative directions.

As building opportunities have become more limited, the importance of brownfield sites has increased, as they offer an excellent opportunity for the development of new neighbourhoods. The redevelopment of industrial, often derelict sites can create modern residential areas with a range of services. One of the advantages of such projects is that the VAT on new housing can be reclaimed, making it more affordable to buy.

In Budapest, examples of brownfield developments include the New Danube Embankment in Újbuda and the Millennium Quarter in Ferencváros. The new districts not only offer modern housing and office space, but also enrich the cityscape with green areas and community spaces. Infrastructure designed in line with the 15-minute city model will allow easy access to all important places for residents, thus contributing to an improved quality of urban life.

Developments now include community spaces that allow residents to organise not only neighbourhoods but also communities of friends. In new buildings, shared spaces such as gyms, community lounges and roof terraces help build connections between people, strengthening community life in the city.

Ultimately, Budapest’s new housing developments are more than just buildings, they are crafting a new kind of city life. Focusing on sustainability, shared spaces and accessible services, these neighbourhoods are reshaping urban living to meet modern lifestyles.

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Featured image: depositphotos.com

November 6, 2024

Hungarian real estate market on the move: latest insights

According to Duna House, the real estate market started the year on a brisk note and is expected to remain buoyant in the coming months.

The Hungarian real estate market performed well in October

Home sales in Hungary climbed 37 percent year-on-year to 10,738 in October, according to a monthly estimate by listed real estate broker Duna House.

Duna House estimated that mortgage outlays reached HUF 117bn (EUR 290) in October, up 128 percent from the same month a year earlier.

According to Duna House’s totals, the turnaround could have started at the end of the summer, as the number of transactions in August already exceeded last year’s level, and in September, the number of transactions exceeded the number before last year.

They added that in October, the stock of mortgage loans for housing increased by some 117 billion forints, more than double last year.

The market’s recovery is also indicated by the fact that month-on-month growth is also visible.

For October, transactions increased by 10 percent compared to the previous month, while mortgage loans increased by 3 percent.

Experts at Duna House believe that supply and demand are strong, so the momentum in residential property sales could continue until the end of the year.

Read also: Addressing Budapest’s housing crisis – Proposal to restrict home purchases by non-EU nationals

The wave of price rises in Budapest could swell in the middle of next year

The capital city saw the most significant pick-up in house-buying in October.

This October brought a recovery in the housing market on both the supply and demand sides that have not been seen for years, which is not usually the case in the autumn, Ingatlan.com said on Monday. According to the specialist portal, these changes can be seen as a prelude to the recovery expected next year.

According to their aggregate, in the tenth month, more than 320,000 people made telephone inquiries about residential properties for sale, an increase of 31 percent year-on-year and 13 percent month-on-month.

In Budapest, interest in residential properties increased by a remarkable 45 percent year-on-year. Across neighbourhoods, demand in October was at least 60 percent higher than a year earlier in districts IV, VIII, X, XIII, and XXIII, suggesting that buyers in the capital who would buy for their own use were the most active.

The October, upturn in demand varies considerably by type of municipality. In the duchies and county seats, interest in apartments and houses for sale increased by 13 percent year-on-year, in the cities by 30 percent, but also in the municipalities by 19 percent. For municipalities, the 21 percent increase in demand was above average in rural municipalities with housing subsidies, while the 17 percent increase was below average in non-rural municipalities with housing subsidies. Csongrád-Csanád stands out in this respect. Residential properties in village voucher municipalities attracted 70 percent more interest, while their non-village voucher counterparts saw a 25 percent increase compared to October last year.

In terms of counties, Pest and Tolna saw the biggest upturn in demand, up 41 and 31 percent, respectively, compared to October last year, but most counties saw demand increase by 10-29 percent. Only the counties of Borsod-Abaúj-Zemplén, Bács-Kiskun and Veszprém saw demand growth below 10 percent.

Meanwhile, the supply side of the housing market also expanded significantly. In October, more than 31.5 thousand residential properties were advertised for sale by owners and real estate agents, up 2.4 percent year-on-year. The extent of the increase in supply is better illustrated by the fact that owners placed more than 70 thousand residential property advertisements in the first ten months of the year. The last time a similarly strong sales performance was recorded was in 2020.

According to László Balogh, chief economist at ingatlan.com, the increase in sales is that owners expect a buoyant market, where they have a better chance of selling their property. Some sellers would like to enter the market as buyers, but most need to sell their homes to do so, which is why they are advertising. Both phenomena point towards a housing market recovery that could pick up in 2025, according to the expert at ingatlan.com. In fact, by next year, the housing market could be injected with EUR 1,000 billion, partly from inflation-linked government bonds, partly from voluntary pension savings, and partly from state subsidies for the population.

Zoltán Gadanecz, founder-owner of GDN Real Estate, expects the property market to become more expensive. In a statement on Monday, he pointed out that a pick-up in demand for credit precedes price rises. The data from the Central Statistical Office (KSH) shows a slight price increase. Still, Gadanecz says that this is not a rise but a normalisation: the real estate market is now returning to the level of the beginning of 2022 if we look at the turnover based on the KSH data.

On the other hand, GDN Real Estate Network’s lending partner, GV Hitelközpont, reports an increase in the number of home loan applicants. This shows that demand will start to pick up, and a pick-up in demand will move the market, so those waiting will act, says Gadanecz. The expert believes that the rebound will not stop at 2022 levels but that next year, from mid-2025 onwards, he calculates, a real upturn will be seen if current trends continue.

Read also: Renting in Hungary – These are the most important things you should know as a foreigner

November 5, 2024

Despite the housing shortage, there is a sharp drop in housing construction in Budapest

The number of home building permits issued in Hungary edged down 2.3pc year-on-year to 14,551 in Q1-Q3, data released by the Central Statistics Office (KSH) on Tuesday show.

The number of permits issued for homes in the capital plunged 33.5pc to 3,391 while the number issued for homes in county seats and cities with populations over 50,000 rose 7.1pc to 3,099. According to KSH, the number issued in smaller cities climbed 14.5pc to 4,339. In the country’s smallest settlements, the number of home building permits issued increased 19.6pc to 3,722.

The number of home completions fell 19.4pc to 8,709. Home completions in the capital dropped 14.6pc to 2,761. The number declined 14.7pc to 1,696 in county seats and cities with populations over 50,000 and was down 29.6pc at 2,223 in smaller cities. In Hungary’s smallest settlements, the number decreased 16.4pc to 2,029.

Compared to the same period in 2023, the number of housing construction permits issued decreased in the Southern Great Plain (-14%) and in Central Transdanubia (-12%), outside Budapest. The largest increases were recorded in Southern Transdanubia (52%) and Northern Great Plain (51%). In these two regions, the role of housing developments related to investments in Paks and Debrecen is dominant.

Detached homes accounted for 53pc of completions. Homes in multi-storey buildings with multiple dwellings made up 42pc of the total and homes in residential parks 2pc.

The average new home size was 99sqm.

The share of homes built by businesses stood at 58pc.

The data show 1,063 homes were demolished or condemned in H1.

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November 5, 2024

Surprising new trends that will revive the Hungarian housing market in 2025

The Hungarian housing market is finally on track for a strong comeback next year after a couple of weak years. Key drivers include real wage growth, a lower base rate from the central bank and improving credit market conditions. Add to this some pre-election government measures and the stage seems set for a rebound.

The government has been rolling out various initiatives aimed at different parts of the housing market, but there is a catch: many of these focus on boosting demand rather than expanding supply. According to G7, there has been a lot of focus on the extension of the 5% tax on new buildings and the overhaul of the rental rules. Meanwhile, newer measures, like the Airbnb restrictions and youth-focused housing programs, are still lacking in detail.

Rent control and housing benefits

The rental market, which usually plays second fiddle to homeownership policies, is now getting more attention. One pivotal move could be extending housing cafeteria benefits to include rent payments—something that could significantly shift renter support. Plus, discussions between the government and banks about capping housing loan interest rates are crucial, which will likely shape lending practices and impact housing demand.

With budget pressures looming large, the government seems keen to find low-cost solutions. Options such as the use of SZÉP cards and voluntary pension savings for housing fit the bill. On the other hand, any large-scale, ambitious improvements are likely to depend on the state of the public finances, which will influence when (and if) they’re announced.

Housing affordability & market trends

For the first time, affordable housing has become a talking point in government communications, which seems to be a major shift. Given the fluctuating house prices and stagnating real wages of recent decades, this acknowledgement feels long overdue. Statements from officials like Gergely Gulyás and Márton Nagy underline a real housing crisis, particularly in the capital and other big cities.

Post-pandemic, the housing market saw a dip, with sales picking up in 2023 but still trailing behind 2019 levels. House price indices are reflecting this pattern too: after a drop in 2022, prices crept back up in 2023 but are still hovering around the 2020-2021 real price levels. Rents are following a similar trajectory.

forint currency economy money — Photo: depositphotos.com

Future outlook

Looking ahead, price trends may hinge on how much of the income from government bonds trickle into the real estate market. Even a partial inflow could spark notable price jumps, especially in major cities and for new builds. Forecasts are calling for potential price increases of 10-20% next year, buoyed by more active investors and continued support from home-buying subsidies.

All signs point to a housing market that’s gearing up for a major shift, fueled by a mix of economic recovery, targeted government measures, and evolving market conditions. While affordability remains a challenge and budget constraints may limit ambitious policies, the next year is set to bring new opportunities, especially for those keeping a close eye on investment trends and policy changes. If the expected wave of investor interest and supportive measures gain traction, the market could see a strong rebound, with rising prices in key urban areas leading the charge.

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November 4, 2024

Construction sector seeks financial relief and expanded programs to bolster home building in Hungary

Government schemes supporting home constructions and renovations strengthen the public’s confidence and the persistence of product manufacturers and contractors, construction industry association ÉVOSZ said on Thursday.

In order to lift home construction from its current low point, in addition to government programmes, market-based financing must settle down, which means interest rate of 5pc or lower, ÉVOSZ head László Koji was quoted in the statement.

Koji said currently home constructions in Hungary are not primarily limited by regulatory issues or lack of capacity, but by the lack of funds.

Domestically produced construction products and contractor capacity are available for the construction of 25,000 new homes, but according to ÉVOSZ’s expectations, only around 16,000 units are expected to be put into use this year, he added.

ÉVOSZ is urging the launch of reformed home renovation schemes as soon as possible and extending eligibility criteria to residential properties built before 2007. It also called for the re-launch the Green Home Construction Programme of the National Bank of Hungary to support the financing of newly built homes.

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Featured image: depositphotos.com

November 1, 2024

Renting in Hungary: These are the most important things you should know as a foreigner

Embarking on the journey of renting in Hungary offers an exciting chance to experience a vibrant culture, but it also brings unique challenges for newcomers. From navigating local rental norms to spotting potential scams, understanding the essentials of Hungary’s rental market is key to a smooth transition. Here’s a comprehensive guide to help you confidently secure the right home, avoid common pitfalls, and settle in with ease.

Rental agreement

Quite self-explanatory, but having a rental agreement is a must when renting in Hungary, as it protects both parties in various ways. Always ensure you sign a written rental agreement, as verbal agreements are not legally binding in Hungary. The contract should clearly outline the terms of the lease, including duration, rent amount, and responsibilities of both parties. Having a formal agreement protects your rights as a tenant.

Deposit and rent

When renting an apartment in Hungary, it’s standard to pay a deposit ranging from one to three months’ rent, along with the first month’s rent upfront. This deposit acts as security for potential damages or unpaid rent. To avoid disputes over the deposit when you move out, thoroughly document the apartment’s condition upon move-in, ideally with photos or videos. This practice is especially important for anyone renting in Hungary to ensure a smooth reclaiming process.

Utility costs

Rental prices in Hungary usually do not include utility costs, such as electricity, gas, water, and internet. It’s essential to clarify with the landlord what costs are covered by your rent and what additional expenses you can expect. Discussing these in detail before signing the lease allows you to budget more effectively and avoid surprises down the line.

Property ownership verification

Before signing a lease, request to see the property’s title deed or proof of ownership. Verifying that the landlord is the legitimate owner, or at least authorised to rent out the property, can protect you from potential scams. Property ownership verification is especially recommended for those new to renting in Hungary, as it reduces the risk of legal issues related to unauthorised rentals.

Bilingual contracts

In Hungary, having your lease agreement in both Hungarian and English is invaluable for clarity. If you are not fluent in Hungarian, consider having a bilingual friend or professional translator review the lease to ensure that you fully understand your rights and responsibilities. This is a critical step in avoiding misunderstandings while renting in Hungary.

Avoiding scams

Avoid rental scams by refraining from making payments until you’ve viewed the apartment and met the landlord in person. Listings that seem unusually cheap or landlords who push you to make quick decisions can be red flags. Take your time, conduct thorough research, and trust your instincts to make safe decisions when renting in Hungary.

Common costs

In addition to the rent, you may be responsible for condominium fees, which cover shared building maintenance and other services. These fees vary depending on the building’s amenities and management practices, so be sure to ask about them during initial discussions with the landlord. This is a key consideration for anyone on a budget to rent in Hungary, as these costs can significantly affect your monthly expenses.

real estate market, Budapest — Source: depositphotos.com

Address registration

After moving into your apartment in Hungary, it’s important to register your address with local authorities to obtain an address card (lakcímkártya). This registration is essential for various administrative needs, such as opening a bank account or accessing health insurance, and it establishes your legal residence in Hungary.

Language assistance

If you’re not fluent in Hungarian, having a bilingual contact to assist with rental agreements and paperwork can be invaluable. You might consider hiring a local real estate agent or legal advisor who can help with translations and clarify contract terms. Language support is particularly helpful for expats renting in Hungary, as it ensures a clear understanding of all obligations.

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Featured image: depositphotos.com

October 31, 2024

Major shift in Budapest: District council approves ban on short-term rentals, package for affordable housing adopted

The local council of Budapest’s District VI, in the city centre, voted on a short-term rental ban from 1 January 2026 at a meeting on Thursday.

In a statement, the local council said residents’ “peace at home” had trumped the decline in budget revenue the ban would entail.

In a referendum in September, around 54pc of the residents of the district voted for the homestay ban. The 20.5pc participation rate was “well over” that for similar votes, such as the 9pc rate for a city-wide survey of residents, the local council noted.

Terézváros Airbnb Budapest — Photo: FB/Soproni

Economy minister discusses affordable housing measures with industry insiders

National Economy Minister Márton Nagy has met with representatives of the biggest property companies in the country and of the construction industry association EVOSZ to discuss government measures to ensure affordable housing, his ministry said on Thursday.

The sides weighed potential state programmes that could pump HUF 20bn-30bn into the local property market to support the development of affordable housing, rental properties and student dormitories, the ministry said.

Nagy said the government would consider a role for state-backed capital funds in supporting the endeavour to ensure affordable housing.

The matter of lowering the VAT rate on home rentals from 27pc to 5pc was also raised.

Nagy said the government was counting on industry players’ active participation in the construction of new homes and rental properties as well as the expansion of dormitory stock. He noted that ten of the 21 measures in the government’s recently unveiled New Economic Policy Action Plan aimed to ensure affordable housing.

Consultations on affordable housing will continue on a regular basis.

Budapest assembly adopts package to ensure affordable housing

The municipal assembly of Budapest adopted a package of proposals aimed at securing government assistance to the city’s housing programmes and to promote optimum use of the existing housing stock and other properties, late on Wednesday.

In his introduction to the package, Mayor Gergely Karácsony said the housing crisis in Budapest called for the initiatives of the city and its districts, targeted use of European Union funding, and a more active role by the central government.

Under the adopted package, the government is requested to publish without delay tenders for municipal housing programmes to be financed from EU structural funds.

The body has authorised the mayor to propose that the government should provide capital funding to municipalities as well as subsidised loans to increase the municipal rental stock. The package also aims to obtain funds from central coffers or EU funding to top up municipal subsidies for energy-saving home renovations.

The assembly expressed its approval of the government’s position that the practice of using flats in Budapest for tourism should be restricted, but suggested that the government’s two-year moratorium should be further shortened “to a legal minimum”.

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Featured image: depositphotos.com

October 31, 2024

Addressing Budapest’s housing crisis: Proposal to restrict home purchases by non-EU nationals

Budapest real estate housing crisis in Budapest's real estate market

Budapest’s leaders are taking bold steps to tackle the housing crisis, proposing a two-year ban on property purchases by non-EEA nationals and pushing for tax reforms to boost long-term rentals.

Addressing the housing crisis in Budapest

Világgazdaság reports that Budapest’s municipal leadership is set to propose a new housing policy aimed at addressing the housing crisis, with a vote expected next Wednesday. Ambrus Kiss, Director General of the Mayor’s Office, outlined key points of the plan during a background meeting. While the capital’s leadership supports the government’s efforts to tackle the housing crisis, they argue that the current measures are insufficient and require additional action. Gergely Karácsony, the city’s mayor, is presenting a ten-point programme seeking government support, which includes the regulation of short-term rentals like Airbnb.

real estate Hungary Budapest — Photo: Daily News Hungary ©

Supporting the rental market

The city is pushing for the government to expedite the implementation of these regulations and introduce tax reforms aimed at encouraging long-term housing. Proposed changes include increasing the tax burden on short-term rentals while reducing taxes for long-term rentals. Specifically, they suggest halving the tourism tax for rentals of more than one year and exempting income tax for housing rented out for more than three years. These measures are designed to motivate homeowners to place their properties on the rental market and alleviate the housing crisis.

Will non-EU nationals be banned from buying a house in Budapest?

Ambrus Kiss has proposed a significant measure to alleviate Budapest’s housing crisis, suggesting a two-year moratorium on property purchases by non-EEA nationals in the capital. This restriction would primarily affect buyers from outside the European Economic Area, including Chinese, Russian, and Arab nationals. The aim is to curb the trend of foreign investors purchasing apartments as assets, which often remain vacant, exacerbating the housing shortage. Kiss emphasised that similar regulations exist in other countries and are not considered discriminatory, highlighting the need to prioritise homes for residents over investments.

Budapest rent prices property prices exceeded property in hungary — Photo: depositphotos.com

Further initiatives

Additionally, the city is urging the government to remove the requirement for parking spaces in new housing developments, arguing that this regulation hinders the adaptive reuse of buildings. This change would enable greater flexibility in repurposing spaces such as former schools into residential units, potentially increasing the housing supply and addressing the ongoing housing crisis in Budapest.

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October 25, 2024

New housing model proposed to address Budapest’s growing housing crisis

budapest property real estate housing residential area university apartment hotel inflation

Dávid Vitézy’s Podmaniczky Movement is proposing the introduction of a housing construction model programme to the Budapest Assembly, and calling for scrapping the sale of a student hostel in Budapest’s District 11.

Budapest is facing a housing crisis “now recognised by both the government and the opposition”, Vitézy said on Facebook on Thursday, and called for “all suitable properties, whether a municipally owned construction site of building, to be utilised as homes or student hostels.”

Vitézy also called for a rental housing programme in which incentives would be provided to property developers to construct affordable rental units. In the proposed model developers would be granted construction rights while the city could retain the right to select would-be tenants and offer housing subsidies to eligible tenants, he added.

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Featured image: depositphotos.com

October 24, 2024

House frozen in time: Inside Pest County’s abandoned modern villa

An abandoned modern villa in Pest County recently captured the Hungarian urbex community’s attention. Many are curious to find out what forced this unique architectural gem’s owners to leave such an astonishing home to decay for eternity. The books and kitchen supplies left behind suggest that the family had to leave in a rush. Curious explorers ventured inside and found some papers that provided a possible background story of the luxurious villa covered in dust.

Abandoned villa in Pest County

As Pénzcentrum writes, urban exploration, or “urbex”, has grown into a popular movement centred on discovering and documenting forgotten, abandoned spaces. From decaying industrial complexes to forgotten homes, the allure of exploring these neglected sites lies in their eerie beauty and untold stories. In Pest County, one such discovery has captivated the Hungarian urbex community—a modern villa, abandoned yet half-furnished, standing as a ghostly reminder of a different time. With its striking architecture and luxurious touches still intact, this villa in Pest County once embodied wealth and success, but now it quietly decays, its grandeur slowly fading.

What happened?

This derelict villa in Pest County tells a broader story of Hungary’s housing crisis, a reflection of the economic hardships faced by many homeowners. According to documents found inside the villa, the owners took out a substantial loan of HUF 160 million (EUR 399,476) in 2011. Of course, we cannot be a hundred percent sure about what happened, but the economic context and the papers strongly suggest that the family could not keep up with paying back the loan.

Once a symbol of affluence, the villa now lies empty, much like other luxury estates that have met similar fates in recent years. As urban explorers wander its halls, the villa’s past echoes through its empty rooms—a forgotten dream left behind, caught in the quiet aftermath of financial ruin.

Urbex’s growing popularity

Urban exploration is not merely about visiting abandoned places; it is a form of cultural documentation that reflects societal changes and historical narratives. Each site holds layers of meaning—stories of families who lived there, economic shifts that led to abandonment, and even architectural styles that tell us about past trends. The villa in Pest County serves as a microcosm of these larger themes, inviting explorers to ponder not just what was lost but also what can be learned from these spaces. The shared interest in photography, history and adventure (of course) brings together these communities, thus it is also an opportunity to meet like-minded people.

Unique places left behind

In another post of spiral urbex, they share another example of neglect within urban landscapes, fire trucks lie abandoned in the yard of a fire station. Plans were once set in motion for their recovery; they were intended to be restored and displayed in a museum dedicated to fire service history. However, due to persistent funding shortages, these plans never materialised, leaving these vehicles exposed and vulnerable for years.

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October 22, 2024

Airbnb effect: Budapest apartment prices start dropping after Airbnb ban

Although short-term rentals, including Airbnb, won’t be banned in Budapest’s District VI (Terézváros) until January 2026, the effects of the September vote are already being felt in the local real estate market, according to László Balogh, chief economic analyst at Ingatlan.com.

Effect of Airbnb ban already felt in Budapest

Since August, the price per square meter for apartments smaller than 50 square meters—which are commonly used as Airbnb rentals—has dropped by about 5%, now averaging HUF 1.037 million (EUR 2,590), Népszava reports. At the same time, the number of properties for sale in this segment has risen sharply from 130 to nearly 200, marking a 50% jump in just three months. In contrast, neighbouring District VII has seen a slight increase in prices during this period.

Terézváros, where short-term rentals are most concentrated, has 2,700 properties listed on Airbnb, accounting for 8-9% of the district’s housing stock. Across all of Budapest, there are around 15,000 Airbnb listings, making up about 1.5% of the city’s total property market.

budapest district vi airbnb property prices — Photo: depositphotos.com

Experts had already anticipated two options for owners of these properties: either sell them or switch to long-term rentals. This shift could slow price growth in the affected areas, possibly even dampening the expected rise in housing prices in the coming year. The ripple effects could also be felt in nearby districts and potentially across the city, where overall price increases may be tempered.

Another surge in prices expected next year?

However, Balogh also pointed out another factor influencing the market: next year, the Hungarian government will pay out around HUF 1,300 billion (EUR 3.25 billion) in bond yields, some of which is likely to flow into real estate, particularly into highly attractive downtown properties. This influx of capital could neutralise the current Airbnb-related price drops, potentially leading to another surge in property prices.

There’s still a lot of uncertainty surrounding Airbnb in Budapest. With no local regulations in place and no clear direction from the government, the situation remains fluid. Lajos Böröcz, Secretary General of the Hungarian Hospitality Employers’ Association, emphasised that even in a worst-case scenario, where Airbnb rentals become unviable, Budapest’s diverse accommodation offerings would still meet the needs of most visitors. However, the sector might lose those travellers who are specifically drawn to Airbnb properties and unwilling to settle for alternatives.

UPDATE

BREAKING NEWS! Another huge tax hike from the Orbán cabinet: this time it’s on short-term rentals in Budapest

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Featured image: depositphotos.com

October 20, 2024

End of flourishing tourism in Budapest? Airbnb moratorium, stricter rules, tax increase to come! – UPDATED

Both the Minister of the Prime Minister’s Office, Gergely Gulyás, and National Economy Minister Márton Nagy, talked about stricter rules concerning Airbnb and accommodation rentals in Budapest. They said there was a housing crisis in the capital, so the government had to intervene to solve it. Therefore, they want to introduce an Airbnb moratorium, stricter rules and higher taxes. Is that the end of the Airbnb sector and a painful blow to the flourishing Hungarian tourism?

Total Airbnb ban in Budapest district

Budapest’s 6th district banned Airbnb-type short-term flat rentals in a referendum in September. We wrote then that experts agreed tourists coming to spend their holiday in an Airbnb-type accommodation in the Hungarian capital will not choose to stay in a hotel instead. They will go to another Central European city like Cracow or Prague, where prices are similar, but Airbnb is not restricted.

Housing crisis in Hungary

In response to the referendum’s shocking result (of course, some were probably not shocked since even the district’s mayor said he would vote for the ban), the Hungarian government decided to rewrite the rules concerning the sector. They said there was a housing crisis in Hungary, so Budapest needed immediate intervention.

National Economy Minister Márton Nagy said short-term, Airbnb-type rentals would be regulated only in the capital, adding that the government was in agreement with the industry insiders on applying a moratorium on the issue of new homestay permits while raising taxes on the activity.

Mr Nagy added further details while presenting a 16-point deregulation package concerning tourism. First, he stated that the tourism sector was “performing very well”, generating 12pc of GDP and over 10pc of tax revenue.

Moratorium, higher taxes and stricter rules on Airbnb in Budapest

However, he said young people had to pay over 50% or 60% of their income for rent, so there was a housing crisis. He added that the government had to intervene because local councils had not resolved the issue. In reality, local councils in Hungary neither had the means nor did they obtain the money to solve such problems generated mostly by the Hungarian government’s policies. Instead, they warned the government about the situation, which the Orbán cabinet neglected until now.

Nagy said the government planned to announce a two-year moratorium on licences for short-term rentals in the capital while raising the tax on Airbnb-type activity by a factor of “four or five”.

airbnb, tourism, travel — Higher taxes or closed Airbnb. Illustration. Source: Pixabay

Gergely Gulyás, the Minister of the Prime Minister’s Office, said the government would assess the extent to which Airbnb contributed to growing rents in the capital before making their final decision about the sector. And whereas flat rentals and related contracts were also in the government’s sights, there was no desire to follow “communist practices” seen in some Western European countries, and the government fully respected property rights, he added. That may mean they will not modify rules concerning long-term rentals in the capital.

Family association happy for stricter regulations on Airbnb

Young family association Ficsak has welcomed the national economy ministry’s plans to tighten regulations on short-term, Airbnb-type rentals. Ficsak told MTI on Friday that the ministry’s planned regulations were an important step in making housing more affordable for Hungarian families. They said that in recent years a significant number of homes in Hungary had been put on the short-term rental market, which had driven up rent and reduced the number of properties available for the long term.

Ficsak said the new regulations could lead to investment properties being placed on the long-term rental market, thereby easing the housing crisis. Rising housing costs have made life difficult for young people and large families in recent years, the association said, adding that the new regulations aimed to give families the chance to find affordable, stable housing. They pointed out that several major cities in Europe have introduced restrictions on short-term rentals, and “these examples show that these kinds of measures have a positive effect on the housing market”.

“Ficsak is convinced that tightening regulations on Airbnb and other platforms like it will contribute to easing housing problems in Hungary and give families a chance to find affordable and secure homes,” the statement said.

Opposition Jobbik also wanted new rules

Dániel Z Kárpát, a lawmaker of Jobbik, said they would provide rent subsidies of 50,000-100,000 forints per month until the housing problems in Hungary were resolved. They would also re-regulate Airbnb-type flat rentals and restore earlier home savings schemes to solve the housing crisis.

UPDATE: Fidesz’s Szentkirályi asks economy minister to address housing crisis

Alexandra Szentkirályi, the Budapest group leader of the ruling Fidesz-Christian Democrats, said on Friday that she had asked Economy Minister Marton Nagy to discuss plans for reducing the housing crisis in Budapest. Szentkirályi said on Facebook that despite promises by Budapest Mayor Gergely Karácsony to deal with the problem, nothing had happened in the past five years. A housing crisis has developed in Budapest, she added.

“I have contacted Economy Minister Marton Nagy in a letter. I am initiating coordination talks on preparing an action plan for housing in the capital in order to address the accommodation difficulties affecting Budapest residents,” she said. Szentkirályi said that she had proposed giving special focus to home purchase options for young people, expanding student accommodation capacity, short-term home rental, Airbnb, the situation of rental homes in the capital, and rents.

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October 18, 2024

Will a huge residential area be built in Budapest?

If the government is serious about supporting housing projects in Budapest, it should support the construction of “Park City”, a project including affordable housing in the city’s 14th district, rather than earmarking the area for the “mini Dubai” office and apartment complex, which will drive prices up further and deepen the housing crisis, Mayor Gergely Karácsony said on Wednesday.

Commenting on statements of Gergely Gulyás, the head of the PM’s Office, at a regular press briefing earlier in the day, Karácsony said on Facebook that instead of supporting a Chinese investment in the south of the city, the government could throw its weight behind Student City, a project aimed at improving student housing.

Budapest is ready to start the largest housing programme of the past 30 years. In the coming years, the municipality will spend 20 billion forints (EUR 50.0m) on rent support, affordable housing, and on bringing empty apartments into the programme, the mayor said. “I realise more would be needed, but that is up to the state, and this is still a lot more than what has been spent on housing in Budapest in the past decades.”

Park City concept Budapest — Photo: FB/Gergely Karácsony

One of the most important causes of the crisis is that only 4 percent of Hungarian apartments is community property, one of the lowest ratios in Europe, he said. In Vienna, 25 percent of flats is owned by the municipality: “That’s the direction we should take, if the government ever manages to surpass its antiquated fixation,” Karácsony said.

Here are some more visuals:

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Here’s what to expect from Budapest’s real estate market in 2025
Hungary could build 25,000 new homes yearly

October 17, 2024

Hungary could build 25,000 new homes yearly

Construction industry association ÉVOSZ said government programmes and lower interest rates were necessary to boost the volume of home construction and renovation in a statement issued on Friday. Hungary could build 25,000 new homes yearly.

ÉVOSZ proposed the government announce a streamlined home renovation scheme and re-launch the Green Home Construction Programme to give the market a boost. It added that potential home buyers would hesitate to borrow unless interest rates fell under 5pc.

ÉVOSZ said no more than 16,000 homes would be completed this year, well under the sector’s capacity to build an annual 25,000 homes.

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

Source: depositphotos.com

October 13, 2024

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.

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.

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October 12, 2024

Orbán cabinet would build new dormitories, boost economy, review rental and Airbnb regulations in Hungary

Orbán cabinet would build new dormitories, review rental and Airbnb regulations in Hungary

Hungary wants to stay out of the “cold trade war” declared by Brussels and Western Europe and adopt a policy of economic neutrality, Gergely Gulyás, the head of the Prime Minister’s Office, said at a press briefing during a cabinet meeting in the renewed Tisza Castle in Geszt, in the southeast of the country, on Thursday. The government also talked about how to boost the economy and the need of new regulations concerning the rental and short-rental, Airbnb markets.

Gulyás said that such a trade war presented “extraordinary risk” to Hungary’s export-driven economy, cutting off the country from markets and investment opportunities. He added that a policy of economic neutrality would help achieve the government’s GDP growth target of 3pc-6pc.

If that level of growth can be achieved, wages will rise, budget revenue will climb and the success of the government’s economic policy will be validated, he said.

Gergely Gulyás in the Tisza Castle in Geszt briefing press after the government meeting finished. Photo: MTI

Stimulating economic growth top priority

He said the cabinet meeting had assessed and weighed the outlooks for the Hungarian and the European economies over the past three days. He added that the fundamental changes to the global economy brought on by the pandemic and the impact of the war in Ukraine required new responses and a new economic policy.

He noted earlier announced government decisions to introduce a credit scheme for young blue-collar workers and a capital programme for SMEs, as well as doubling the tax preference for families with children by January 1, 2026. He said the government would also make a priority of affordable housing, wage increases based on economic growth, and advances for SMEs. Related measures will be drafted in detail by the end of October and submitted to lawmakers with the 2025 budget bill early in November, he added.

Orbán cabinet wants to ease housing problems with regulating Airbnb?

He pointed to programmes supporting dormitories and housing for young people and acknowledged the higher rate of home ownership in Hungary in comparison with Western Europe. He said the appreciation in home values in recent years had resulted in a housing challenge, especially for young people. He added that the economy ministry had been tasked with reviewing international practices regarding rental regulations, including those for Airbnb-type short-term rentals.

He said the government would make accelerating home construction and ensuring affordable housing a “priority task” over the next two years.

He said the government wanted employers and unions to reach a multi-year agreement on minimum wage rises that would feed through to the average wage.

Gulyás said the economy minister also had a mandate to draft measures on further incentives for improving the position of SMEs in the coming 2-3 weeks.

Fielding questions, Gulyás said a HUF 500bn increase in the deficit target was “technical”, noting that the 4.5pc target relative to GDP was unchanged and “achievable”.

He said the forint’s recent weakening was mainly due to external political and economic factors, such as the situation in the Middle East. The government has no concrete exchange rate target, rather the goal is to avoid volatility, he added.

Significant minimum wage increase will come

Asked to comment on National Economy Minister Márton Nagy’s projection that the minimum wage would reach EUR 1,000/month by the start of 2028, Gulyás said it was “completely realistic”.

He said a number of proposals had come before the government on regulating short-term rentals, but a decision on the matter hadn’t been taken yet. The issue requires careful consideration as it involves complex legal problems, he added.

Gulyás said the state’s acquisition of a controlling stake in regional railway company GYSEV was of “great significance” and the company could serve as a paradigm for levels of service in public transport.

10pc minimum wage rise would be ‘manageable’ for construction industry, trade union says

A 10pc minimum wage rise for 2025 would be “manageable” for construction industry companies, the National Federation of Hungarian Building Contractors (ÉVOSZ) said on Thursday. Talks between employers, unions and the government on next year’s minimum wage increase are ongoing. ÉVOSZ said that an annual 10-11pc minimum wage increase in 2026-2027 could only be implemented parallel with a number of economic development measures, more favourable lending conditions and an improvement in industrial efficiency.

ÉVOSZ noted that wages in the construction sector had risen 17.5pc, on average, in 2023 and were set to climb by 12pc in 2024. It added that wages in the sector were still just 80pc of the national average for the business sector. ÉVOSZ said order stock was under 80pc of last year’s levels at around 90pc of businesses, adding that redundancies couldn’t be excluded given the circumstances. It also pointed to the impact of exchange rates on the sector.

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October 3, 2024

Association attaches conditions to approval of Hungarian government’s plan to transfer pension savings to housing

retirement age pension hungary pensioners

The Hungarian Association of Pension and Health Care Funds (ÖPOSZ) said government plans to clear the use of some pension savings for home purchases could serve its members’ long-term interests, with some conditions.

In the view of the organisation, the extension of the possibility to use pension savings for the purpose of acquiring real estate – if designed in a suitable, long-term way, fitting into the system of self-care – can serve the long-term interests of the members and can even make it more attractive for younger generations to start saving in pension funds.

According to a market survey presented by the Ministerial Commissioner, this could be equivalent to around HUF 300 billion (EUR 750 million), which, assuming a housing price of HUF 60 million (EUR 150 thousand) and a 15 percent deductible, would mean around 30,000 transactions involving housing loans or other sources.

ÖPOSZ has submitted comments on the proposed measure to the National Economy Ministry, it added.

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October 2, 2024

Hungarian housing market: Buyer demand reaches 2-year high

Buyer interest in the Hungarian housing market has surged, as government home-building subsidies and lower interest rates create favourable conditions for purchasers.

According to Pénzcentrum, in Budapest, 23 out of every 100 homes sold were purchased by first-time buyers, while in rural areas this figure rises to 26%. Experts from Duna House estimate that the average price for a first home is HUF 44 million (EUR 110,000) in the capital and HUF 34 million (EUR 85,000) in rural areas.

Government subsidies, falling mortgage rates, and an improving economic outlook have sparked a Hungarian housing market boom in 2024, with buyer demand reaching its highest level in two years. Duna House reports that 42% more properties have been sold in Hungary so far this year compared to the same period in 2023. The real estate market is currently driven by investors, families moving to larger homes, and first-time buyers.

Data from Duna House reveals that the proportion of first-time homebuyers in the Hungarian housing market has increased by 1% in Budapest and by 2% in rural areas compared to last year. This means that 23% of properties sold in Budapest, and 26% in rural areas, have been purchased by first-time buyers, according to Károly Benedikt, Head of PR and Analysis at Duna House.

Significant rise in first-time homebuyers in the Hungarian housing market

budapest property real estate housing market residential area university apartment hotel — Budapest, Hungary. Source: depositphotos.com

First-time buyers in Budapest are spending an average of HUF 44 million (EUR 110,000) on properties that offer 52 square metres of living space—5 square metres less than last year. In rural areas, they are paying approximately HUF 34 million (EUR 85,000) for much larger homes, averaging 84 square metres.

A third of first-time buyers in Budapest are aged between 20 and 30, while more than a quarter are between 30 and 40. The age distribution is similar in rural areas, where 31% of first-time buyers fall into each of these age brackets.

“First-time homebuyers benefit from programmes such as the 10% deposit option, CSOK Plusz subsidies, which include partial debt relief, and waived fees. These incentives, coupled with lower interest rates and an improving economy, are helping more people purchase their first home,” Benedikt explained.

lake balaton property real estate (1) housing market — Lake Balaton. Source: depositphotos.com

The cost of a first home varies significantly across rural Hungary. In Eastern Hungary, properties are being sold for between HUF 18.3 million (EUR 46,000) and HUF 38.4 million (EUR 96,600). In Western Hungary, prices range from HUF 23.7 million (EUR 60,000) to HUF 31 million (EUR 78,000). In Pest County, near the capital, the average price stands at HUF 43.3 million (EUR 109,000), close to the average in Budapest.

According to Duna House sales data, 19.3% of homes sold last year were bought by first-time buyers in the Hungarian housing market. This year, in the first eight months, the share remains almost identical at 19.4%. However, a closer analysis reveals that from January to August 2023, only 11.2% of homes were purchased by first-time buyers. This year, the share has increased by over 8 percentage points, indicating a stronger presence of first-time buyers in the Hungarian housing market.

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