Hungary is promoting its role as a “meeting point” for investments from the East and the West at the EXPO REAL international fair for real estate and investment in Munich, the Hungarian Investment Promotion Agency (HIPA) and the Property Developers Roundtable Association (IFK) told MTI.
EXPO REAL, with over 2,000 exhibitors from 75 countries, is expected to draw close to 40,000 professionals on October 7-9.
The Hungarian stand at the fair will focus on industrial and logistics developments, but will also feature residential, hotel and office projects by big local developers. As in earlier years, IFK is organising the stand with the support of HIPA and real estate consultancy CBRE.
The main exhibitors are HelloParks, a Futureal group member, and Innovinia, the owner of the IG Park portfolio. INPARK, ATENOR, Biggeorge Property and GLP Hungary are also showing, while projects in Debrecen, Kaposvár and Péecs are in the spotlight.
HIPA CEO István Joó noted that Hungary had attracted record FDI of over EUR 13bn last year.
IFK chairman Ernő Takács said property developments with a value of EUR 400m-500m were in the pipeline in Hungary.
Hungary has over 5,140,000 square metres of modern industrial space, including more than 3,500,000 in the capital.
Home rental rates in Hungary rose 9.9pc year-on-year in August, data compiled by the Central Statistics Office (KSH) from listings site Ingatlan.com show.
Rental rates in the capital increased 9.1pc, KSH said.
In a month-on-month comparison, home rental rates rose 0.5pc for the whole country and edged up 0.1pc in Budapest.
In H1, the monthly rental rate for a flat in the capital averaged HUF 250,000 (EUR 634). A home in a large city in the west of the country could be rented for HUF 178,000 (EUR 452)/month.
As we wrote today about “Airbnb issue in Hungary”, with low turnout and almost identical turnout, the VI district ordered a ban, details HERE.
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Shifting trends in Budapest: Real estate prices, population declines, and creative housing solutions – VIDEO
The local council told MTI on Monday that around 54pc of the residents of Budapest’s District VI, in the city center, voted for a homestay ban in a two-week referendum that ended Sunday.
The council said that of the 6,083 votes cast, 3,265 backed the ban, and 2,818 were against it. The 20.52 % participation rate was “well over” the rate for similar votes.
Opponents of the ban have provided figures to show that it will not make housing or the price of housing in Budapest any cheaper, as other bans in other world cities have proved. The mayor said that the majority of Airbnb apartment owners are a few wealthy businessmen. Still, on the contrary, the registration clearly shows that most owners (70%) rent out only one apartment.
The figures show that 80% of residents did not express an opinion or that the yes and no percentages are so close that with such a low turnout, it is impossible to determine the true intentions of the district’s residents.
In contrast, the mayor, who invested a lot of energy in campaigning for the ban, declared the result valid and acceptable.
As a result, the local council will ban short-term homestays from January 1, 2026.
This decision will cost the district budget minus €2 million a year. Local hospitality outlets will also experience a severe drop in revenues.
In related news, according to press reports, the Hungarian ruling parties also want to ban Airbnb-type apartments to drive tourists to hotels. On Sunday, Alexandra Szentkirályi, the political group leader of Fidesz in Budapest, even spoke about such a ban. It is important to note here that the vast majority of Hungarian hotels are owned by businessmen close to Fidesz, and the Prime Minister’s son-in-law also owns a number of luxury hotels.
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Shifting trends in Budapest: Real estate prices, population declines, and creative housing solutions, details here.
Airbnb association takes up the fight against possible ban in Budapest, details HERE
Over the past two decades, Budapest’s real estate market and population landscape have undergone significant changes, with varying trends across its districts. These shifts reflect broader transformations in the capital, from population declines in the city centre to rising property prices in certain areas, and even the emergence of tiny, innovative living spaces.
Population decline in Budapest’s core districts
Between 2001 and 2022, Budapest’s population decreased by 5%, with 17 out of its 23 districts experiencing a decline, G7 reports. Notably, the most severe population losses occurred in the central districts of the city, such as the V, VI, and VII districts. In the V and VII districts alone, populations dropped by 24%, while the VI district saw a 20% reduction.
Interestingly, while inner-city districts faced depopulation, areas on the outskirts saw growth. The XXIII district recorded nearly a 10% increase in population, with the XXII and XIII districts also experiencing significant growth, each over 7%.
The issue of population decline in the VI district has been highlighted in connection with a potential ban on Airbnb. Local authorities have raised concerns that short-term rentals could be driving residents away, a factor contributing to the district’s noticeable depopulation.
While population declines mark the city centre, the real estate market in Budapest has seen notable activity, especially over the summer. Prices nationwide have shown little month-to-month change, with a slight increase of just 0.1% between July and August. However, over the past year, real estate prices have continued to climb at a steady rate of 6.5%, a slight uptick from the previous annual figure of 6.4%, László Balogh, economy expert at ingatlan.com, told Economx.
In Budapest’s outskirts, specifically in the agglomeration of Pest County, real estate prices surged by 1.2% in July, while the rest of the country saw more mixed results. Despite this, the annual growth in Pest County remained the lowest in Hungary, at only 3.2%.
Central Budapest’s luxury real estate market saw some price adjustments recently. In the VI district, the average price per square metre for premium apartments dropped by 1% in just four weeks, from HUF 1.45 million (EUR 3,670) to HUF 1.43 million (EUR 3,618). This decline comes amid broader discussions about potential regulations targeting short-term rentals, like Airbnb. In mid-September, a referendum on banning short-term rentals is set to conclude in the VI district, with government actions on the matter likely to follow.
Despite these fluctuations, real estate remains a hot commodity in several Budapest districts, with average prices per square metre exceeding HUF 1 million (EUR 2,530) in 11 districts. Meanwhile, in four districts—XVII, XXI, XX, and XXIII—prices remain more affordable, with average prices still under HUF 800,000 (EUR 2,024) per square metre.
Creative solutions in Budapest’s housing market
Amid these changing trends, creative housing solutions have emerged in Budapest. The city recently gained attention for what could be Hungary’s smallest apartment. Located near Nyugati station, this 3.2-square-metre property originally served as a bathroom, but the owner has transformed it into a fully functional living space.
The compact apartment, currently available for rent on Airbnb, includes a kitchen area, bathroom, and sleeping loft accessible by ladder. Despite its small size, the apartment is cleverly designed to meet basic needs for a short stay. However, it lacks natural light, with only a small window by the bed and a ventilation system to provide fresh air.
This tiny apartment is also up for sale, along with a larger, 30-square-metre property, underscoring the city’s growing interest in unconventional housing solutions as real estate prices and demand continue to rise.
Budapest is considered one of the less affordable cities, according to the central bank’s comparison of the housing market. The dynamic growth of housing prices in Central and Eastern Europe over the past 4-5 years has narrowed the previously significant gap in price levels between the more developed regions of Europe and the rapidly developing Central and Eastern European countries, writes Pénzcentrum.
Although internal migration is relatively uncommon among Hungarians, it is still feasible to relocate to another part of the country for a job with better opportunities, education, healthcare, or family reasons.
The latest data from the Hungarian Central Statistical Office (KSH) shows that the majority of the population, 38%, resides in the eastern part of the country. Meanwhile, 32% live in the capital, Budapest, and Pest County, and only 30% of the country’s total population lives in the western part, known as Transdanubia. According to the 2022 census, the most populous of the nine county seats in the Transdanubian region is Pécs, with a population of 139,000. However, the population of all county seats has decreased since the 2011 census.
Despite the slightly reduced popularity of suburban areas around larger cities, which offer more space and natural surroundings, these areas remain highly sought after by families looking for a home. This trend partly explains the declining population in some county seats, according to Károly Benedikt, Head of PR and Analysis at Duna House. For example, Győr, which has the second-largest population (127,000), experienced the smallest decrease in permanent residents, at just 1.5%.
Housing affordability remains a challenge in Hungary, but renting in Budapest is cheaper than in many other regional capitals. While few new homes are being built in Hungary, they are still cheaper than those in Prague or Bratislava, according to a new housing market study.
Housing affordability in Hungary has not changed significantly since 2022, with wages in Hungary meaning that property remains expensive compared to other countries, as noted in the Deloitte Property Index 2024, published on Monday (read more in THIS article).
It is often cheaper to buy a home abroad than in the Hungarian cities’ housing market
Among the capital cities, Budapest ranks in the middle in terms of affordability, even though affordability slightly worsened from 2022 to 2023. “Looking at the housing market in 2023, for instance, the average price per square meter of new housing in Italy (EUR 2,118) was lower than in all four Visegrad countries. However, in Italy, second-hand housing is already cheaper than second-hand housing in the Czech Republic, Slovakia, and Poland,” said Gábor Kohári, a real estate consultancy expert at Deloitte Hungary.
According to G7, this trend is evident in the data: in Budapest last year, the average salary required 10.4 years of savings to buy a new 70-square-meter apartment, while the national average was 10.2 years. Hungary built the fourth fewest dwellings per 1,000 inhabitants among the 24 countries surveyed last year, a trend expected to continue in 2023, as it did in 2022.
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Hungarians go shopping abroad because Hungary became too expensive – Read here
New apartment prices in Budapest see highest increase among European capitals in 2023 – Read here
In a bid to save Hungarian castles from deterioration, the Hungarian Ministry of Construction and Transport has introduced new legislation that allows individuals to acquire ownership of a castle for free. As expected, the conditions are very stringent.
Destined for deterioration
Turizmus reports that Regő Lánszki, State Secretary for Architecture at Hungary’s Ministry of Construction and Transport, announced the introduction of a “trial year” for new legislation, during which eight historic properties will be put up for tender. These include prominent castles such as the Sándor Metternich Castle and the Esterházy Castle. Lánszki emphasised that many Hungarian castles, nationalised in the mid-20th century and stripped of their original owners, were neglected and repurposed as tractor garages and grain storage facilities, leading to their saddening deterioration.
Sándor Metternich Castle. Photo: NÖF
Private capital to save Hungarian castles
Lánszki highlighted that over a third of Hungary‘s castles were irreparably destroyed, with the remaining suffering severe decay. While many neighbouring countries have restituted their castles since the 1990s, Hungary opted not to return them to former owners. Of the more than 100 state-owned castles, only 13 or 14 have been partially renovated, primarily with EU funds, yet none have been fully restored. Lánszki suggested that private investment could be key to renovating and managing these castles while ensuring they remain fully accessible to the public, a concept already successfully implemented in various countries around the world.
Strict conditions
Lánszki further explained that while the first version of the law on the sustainable development of cultural heritage, referred to as the “castles law,” was passed in December 2023, the Constitutional Court of Hungary requested additional guarantees on long-term asset management. The law was subsequently revised and re-adopted by Parliament in June.
Lánszki emphasised that the law imposes strict conditions, including free public access to castle parks for 300 days a year, reasonably priced tickets for public collections, and a requirement for new owners to implement a full renovation plan within ten years, along with a 30-year maintenance and management plan. He stressed that these Hungarian castles are not being “given away for free” but come with significant financial obligations.
Sümeg Palace. Photo: NÖF
Preserving castles
The Ministry has committed to completing an initial survey of Hungarian castles by 31 August, identifying those in poor condition or poorly managed. The law’s annex lists 48 castles, with eight undergoing comprehensive documentation to kickstart the trial year. A tender call for these properties will be published next week, open to individuals or legal entities who pay a HUF 10 million (EUR 25,459) application fee.
Contracts must be finalised within 60 days, with the minister selecting the proposal that best supports cultural heritage and conservation. Strict conditions on renovation, maintenance, and public access are enforced, with properties reverting to state ownership if these are not met. Lánszki expressed hope that domestic businesses, churches, municipalities, or individuals will invest in preserving these Hungarian castles.
The Hungarian government believes the country’s economy and the state budget are struggling because of the Hungarian people’s low consumption rate. The Orbán cabinet thinks they should somehow facilitate the release of savings, which statistics show to be high. Therefore, the Economic Cabinet is discussing an initiative allowing savings to be spent on home buying tax-free.
Property prices in Hungary may skyrocket again
According to G7.hu, the VAT revenue of the state budget is EUR 1.27 billion lower than calculated during the budget planning. Some experts believe one of the main reasons is the high prices in Hungary and the shopping tourism, as a consequence. We wrote HEREthat the number of Hungarians shopping abroad because of the lower prices is rising unstoppably.
Meanwhile, the government believes that one of the main reasons behind the decreasing consumption is the growing savings, which the Hungarians do not want to spend due to the multiple crises between 2020 and 2024.
Budapest, Hungary. Source: depositphotos.com
The Economic Cabinet is now mulling over an initiative allowing people to spend their savings on home buying tax-free. Even though we do not know any details, such a measure would revitalise the sluggish Hungarian property market. The proposal would enable money in pension funds, long-term investment accounts, and life insurance to be spent on property. It might happen that the government would make that possible even for owners of government bonds. Those two coffers contain EUR 28 and 33.08 billion, respectively. Currently, people do not spend their yield.
New bank products needed
Such a large amount of money would stimulate the Hungarian construction industry and the country’s economy. Márton Nagy, Hungary’s national economy minister, said growing real wages in Hungary does not result in more consumption in the retail sector. Instead, people spend more on housing.
Photo: FB/Budavári Palotanegyed
Péter Gergely, a BiztosDöntés.huexpert, said banks should create new financial products to cover new needs. For example, they should have new real estate loans adjusted to government bond deadlines and yield payments. He added those savings could lower property interest rates and divert people’s attention to government bonds since they would have a new role in the market.
G7.hu wrote that the most pressing question is how the market will price the new measures and whether or not they would cause a considerable property cost increase.
Photo: www.facebook.com/spiceofeurope/
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New apartment prices in Budapest see highest increase among European capitals in 2023 – read more HERE
Deloitte conducted a survey covering 24 European countries and 59 cities. According to the report, Budapest experienced the most significant rise in new apartment prices among EU capitals last year, with an increase of 11.2% in Hungarian forints.
Budapest sees highest rise in new apartment prices
According to the report of Telex, Warsaw (9.7%) and Oslo (7.2%) followed behind. No other European capitals saw price increases above 5% in the past year.
When considering prices in euros, Budapest also saw the highest rise.
However, Budapest remains relatively affordable compared to the region, with an average price of EUR 3,260 per square meter. New apartments are more expensive in Prague (EUR 5,153) and Bratislava (EUR 3,884), while Warsaw has lower prices (EUR 3,022).
Paris remains the most expensive capital, with an average price of EUR 14,900 per square meter for new apartments, followed by Munich at EUR 10,900. Copenhagen saw the largest drop in new apartment prices in 2023, down by 7.4%.
The survey also examined London, where central city prices fell by 12.5%. When looking at countries rather than cities, Italy experienced the greatest decrease in new apartment prices. Austria is the most expensive country, with an average price of EUR 4,920 per square meter, followed by Germany (EUR 4,700), France (EUR 4,538), and the Netherlands (EUR 4,266).
In recent years, the gap between Central and Eastern European and Western European apartment prices has narrowed. In 2023, the price of new apartments in Italy fell below the average level of the four Visegrád countries (Czech Republic, Hungary, Poland, and Slovakia). Additionally, used apartments in Italy are now cheaper than in the Czech Republic, Slovakia, and Poland. Hungary was among the lowest in terms of new apartment construction per capita in the 24 countries surveyed in both 2022 and 2023.
Rental prices in Europe
Deloitte’s Property Index also analysed rental prices: Budapest has the 18th lowest rental cost among 59 European cities, with an average of EUR 11.3 per square meter, similar to Linz, Graz, and Athens. However, it’s worth noting that The Economist reported in February that
renting an apartment in Budapest is the most expensive relative to wages.
The survey also looked at how many years of average gross salary are needed to buy a typical 70-square-meter new apartment. In Hungary, this amount is 10.2 years in 2023, compared to 13.3 years in the Czech Republic. In Poland, the Netherlands, the UK, and Slovenia, it ranges from 6 to 8 years. In Romania and Italy, it’s 5 to 6 years, while in Denmark and Norway, it’s 4.7 and 4.8 years, respectively.
In 2023, mortgage interest rates varied significantly across Europe. Poland had the highest rates at 8.1%, followed by Romania at 7.7% and Hungary at 7.4%. However, Hungary also offered more favourable subsidised loan options, though these often do not reach those who need them the most. The lowest interest rates were found in Belgium (3.33%), Croatia (3.26%), and Spain (3.45%).
It is common knowledge that real estate prices are constantly growing in the Hungarian capital. However, in 2024, the Budapest agglomeration’s real estate market surged, with a 70% increase in transactions too. Among the agglomeration’s sectors, the southern one was the most popular, while the northern sector offered more affordable options.
Shifting tendencies
Economxnotes that following the post-pandemic property boom, the Budapest agglomeration has seen a stabilisation in its real estate market since 2022. The first half of 2024 witnessed a significant surge in transactions within the agglomeration, driven by renewed home creation subsidies. Transactions in the first half of 2024 increased by 3 percent compared to the same period in 2022 and by a remarkable 70 percent compared to the first half of 2023.
As demand soared, the average price per square metre rose by 6 percent to HUF 628,000 (EUR 1,593), with buyers spending an average of HUF 72 million (EUR 182,647) on properties—21 percent more than the previous year—while also opting for larger homes, with an average increase of 14 square metres in floor space.
Source: Pixabay
The most popular area in the Budapest agglomeration
The Budapest agglomeration can be divided into six sectors. In the first half of 2024, the southern sector emerged as the most sought-after area within the Budapest agglomeration, accounting for 29 percent of all property sales, according to Duna House data. Homebuyers in this sector saw a 6 percent increase in average price per square metre, now at HUF 626,000 (EUR 1,591), and spent an average of HUF 72.6 million (EUR 184,193) on properties, which were about 116 square metres on average. This represents an increase of HUF 20 million (EUR 50,742) from the previous year.
The south-eastern sector also attracted significant attention, with 22 percent of buyers choosing this area. Here, the average price per square metre was HUF 561,000 (EUR 1,423), and properties averaged HUF 55.3 million (EUR 140,292), the lowest in the Budapest agglomeration. In contrast, the north-western sector witnessed the highest spending, with buyers investing an average of HUF 97.56 million (EUR 247,501) for homes around 140 square metres. This data highlights the diverse pricing and popularity across different sectors of the Budapest agglomeration.
The most expensive and the cheapest areas
While the southern sector is popular, it doesn’t lead in terms of price per square metre in the Budapest agglomeration. The western sector is pricier, with an average of HUF 679,000 (EUR 1,723) per square metre. In contrast, the northern sector offers a more cost-effective option, with the lowest average price per square metre at HUF 552,000 (EUR 1,400), where buyers typically spend HUF 62.9 million (EUR 159,576) on homes averaging 114 square metres. The eastern sector saw the fewest transactions, accounting for just 8 percent of sales, with buyers paying an average of HUF 591,000 (EUR 1,499) per square metre for 118-square-metre homes.
The Hungarian real estate market has experienced notable price increases compared to the first quarter of the year. Average costs per square metre in Budapest have consistently remained above HUF 1 million (EUR 2,534). Concurrently, rents in the capital have risen by as much as 15 percent compared to the previous year. Data from rental platforms indicates that further increases are anticipated as rental agreements expire during the summer.
Hungarian real estate prices rose in July
According to Infostart, purchasing property in Hungary has become more expensive, with the annual rate of house price appreciation surging from 1.6 percent in January to 6.4 percent in July. Data from ingatlan.com reveals that the most significant price increases were observed in Eastern Hungary, including cities such as Szeged and Debrecen, where house prices have risen by 8.1 to 8.3 percent compared to the previous year. In contrast, Pest County experienced the slowest growth, with prices rising by around 3 percent.
László Balogh, Chief Economic Expert at ingatlan.com, noted that the average Hungarian real estate price per square metre of property in Budapest was HUF 1.02 million (EUR 2,585) in July. He added that while some districts in the capital are relatively affordable, others require significantly higher budgets.
In Districts VIII, XI, XIII, and XIV, Hungarian real estate prices range from HUF 970,000 to 1.2 million (EUR 2,457 – 2,585) per square metre. However, in the most expensive area, District V, the average price per square metre is approximately HUF 1.8 million (EUR 4,560). In comparison, in District XXIII, the cost of one square metre of property is less than HUF 700,000 (EUR 1,773).
Among other major cities, Debrecen is the most expensive, with an average cost of HUF 815,000 (EUR 2,065) per square metre. In Győr and Veszprém, average Hungarian real estate prices per square metre range between HUF 783,000 and 786,000 (EUR 1,984 – 1,991). Conversely, in Kaposvár, Szolnok, Miskolc, and Békéscsaba, average prices are between HUF 441,000 and HUF 479,000 (EUR 1,117 – 1,213). In Salgótarján, prices for one square metre were below HUF 300,000 (EUR 760) in July.
László Balogh pointed out that the price upturn in the Hungarian real estate market has urged those planning to buy a home to enter the market instead of waiting, driving up demand. Indeed, July performed extremely well in terms of the number of people seeking properties on ingatlan.com.
Photo: Alpár Kató / Daily News Hungary
Budapest sees rents surging with the start of the semester
The end of the summer marks the end of many annual rental contracts, often coming with an increase in rent prices when leases are renewed. Meanwhile, demand on the rental market usually increases significantly at this time, as students in higher education flock to the capital come September. As DNH surveyed here, shifts in the Hungarian rental market commenced in many cities across the country after university admission scores were announced earlier in July.
As for Budapest, Index reports that in June, landlords asked for an average of HUF 239,000 (EUR 605) a month, but by July, tenants had to fork out HUF 245,000 (EUR 621). Overall, prices of Budapest flats have been affected by last month’s growth to varying degrees. Rents below HUF 200,000 (EUR 507) have risen the most, with some being up to 15 percent more expensive than last year. In comparison, the monthly cost increase for apartments that lease for HUF 200 to 350,000 (EUR 507 to 887) was less than 10 percent.
However, according to the social renting platform rentingo.com, there has also been a slight change in the amount of money offered by tenants for a flat. After four months of steady decline, the average amount they were willing to pay rose to HUF 219,000 (EUR 555) in July, from HUF 216,000 (EUR 547) the previous month. However, it is clear that this increase is well below the change in rent prices, meaning that, as Index points out, the gap between supply and demand has broadened to 12 percent.
According to László Balogh, the fast pace of house price appreciation and the intense demand for rental apartments in the Hungarian real estate market can drive investors back into the market in the future. This can not only give the sector a short-term boost but, as he highlighted, “The return of investors could also restore the faith of real estate developers in housing, which could further stimulate the market and contribute to economic growth in the longer term.”
Adnan Polat, a Turkish businessman closely linked to the Orbán family, is set to continue the development of the City Pearl residential complex on Soroksári Road, next to MÜPA (Palace of Arts) in Budapest, with four new phases.
A huge residential project
The Millennium Tower III and II office buildings in District IX of Budapest, close to Soroksári Road. Photo: MTVA/Bizományosi: Róka László
Polat’s project company, APD Real Estate Ltd., submitted applications in July for preliminary environmental impact assessments and unified environmental usage permits for the third, fourth, fifth, and sixth phases of the six-phase project on the 4.6-hectare site of the former Közvágóhíd, Népszava writes. These applications were filed with the Pest County Government Office, known for its close ties to the Hungarian government.
The first two phases received permits without prior assessment, under the assertion that they would have no environmental impact. According to the submitted documents, the new concrete structures, the influx of thousands of residents and cars, as well as new restaurants and shops, will similarly have no significant environmental effects.
The new development, bounded by Vágóhíd Street, Soroksári Road, Máriássy Street, and Vaskapu Street, will feature five residential towers, each 12-13 stories high, housing a total of 1,098 apartments. The ground and first floors of the buildings will offer 8,350 square meters of space for restaurants, shops, offices, and a two-story, 1,200-square-meter fitness complex. A two-level underground garage with a capacity for 1,747 cars is also planned. A large square with a “grand amphitheatre,” accessible via green steps and surrounded by shops and restaurants, will be created in front of the partly preserved old water tower.
Building of the new office and residential complex called City Pearl in 2022. Photo: MTVA/Bizományosi: Balaton József
The water tower, pavilion building at the entrance, and statues of bulls on either side of the gate will be restored. The water tower will be leased to the municipality for ten years, while the ground floor of the pavilion will house shops, cafes, and restaurants. The facades of the old slaughterhouse buildings will be rebuilt to resemble their original design, albeit using new materials, raising concerns about authenticity.
The environmental impact assessment application, submitted on 3 August, indicates that the green space ratio will be 15% in the new phases, an improvement over the 8.5% in the first two phases. Construction of the third phase is set to begin next spring, with subsequent phases starting in 2027, 2030, and 2031, and the entire project is expected to be completed by February 2034. During construction, an additional 84 trucks per day are anticipated, and once completed, the development is expected to generate nearly 5,000 additional car trips daily, representing a significant increase in local traffic.
Little to no effect on the environment?
The new district will accommodate approximately 4,000 new residents, several hundred employees, and numerous shoppers and visitors to the commercial and dining establishments. However, the documentation claims that the development will have minimal environmental impact.
Traffic-related air pollution is expected to increase slightly but remain below health thresholds in residential areas, and noise levels will not be perceptibly higher. According to the documents, the climate adaptability of the area will not change significantly, despite the installation of numerous split air conditioning units. Since there are currently no plants on the site, the project will not affect natural values.
The authors of the document conclude that the low environmental impacts will exclude any negative health effects, suggesting that obtaining the necessary permits should face no obstacles.
The Hungarian real estate market has experienced a notable revival in 2024, reversing previous years’ downturns. Data from the Hungarian Central Statistical Office (KSH) shows a 36 percent increase in home sales. With the overall house price index reaching 291 percent of the 2015 base, Hungary leads the EU in housing price growth, highlighting a significant recovery and ongoing expansion in the market.
Hungarian real estate market in recovery
Economxreports that the Hungarian real estate market has shown remarkable signs of recovery in early 2024, following a downturn in previous years. According to the Hungarian Central Statistical Office (KSH), the number of homes sold increased by 36 percent in the first quarter of the year, reversing a 23 percent decline from the previous year. This resurgence comes with a notable price hike, with existing house prices rising by 5.3 percent and new house prices by 4.6 percent quarterly. The price increase was widespread, except for detached houses in eastern Hungary, where no significant change was observed.
Substantial growth
In 2023, the housing market saw a slower price increase, yet the overall house price index reached 271 percent of the 2015 base. Despite consumer price inflation outpacing nominal house price growth last year, leading to a 9.4 percent decrease in real prices, the first quarter of 2024 marked a significant shift. Real prices of existing and new dwellings were up by 4.0 percent and 3.4 percent quarter-on-quarter, respectively, and rose by 4.4 percent and 10 percent year-on-year. As of early 2024, the real price of existing houses stood at 74 percent above the 2015 base, while new homes were 111 percent higher, highlighting a substantial recovery and growth in the Hungarian real estate market.
Insane price per square metre
In the Hungarian real estate market, new housing prices have surged, increasing threefold since 2015, compared to a doubling in construction costs. In 2023, the average new home price rose to HUF 62 million (EUR 156 thousand) and further increased to HUF 65.8 million (EUR 166 thousand) in early 2024, with the price per square metre nearing HUF 1.2 million (EUR 3,020). Existing dwellings also saw price rises, with the average price reaching HUF 31.4 million (EUR 79 thousand) in early 2024, up from HUF 29.2 million (EUR 74 thousand) in 2023. In Budapest, the average price per square metre for existing apartments increased to HUF 918,000 (EUR 2,310).
Photo: Alpár Kató / Daily News Hungary
One of the biggest growths in Europe
In the first quarter of 2024, the Hungarian real estate market saw significant growth, with the aggregate house price index rising by 5.2 percent. This increase places Hungary at the top among EU countries, with house prices nearly 291 percent above the 2015 base, according to the Central Statistical Office (KSH). Across the EU, the aggregate housing price index stood at 149 percent of the 2015 base, with a modest 0.4 percent quarterly rise. Other countries like Bulgaria and Poland also experienced notable price jumps, while Denmark and France saw declines. Hungary’s domestic price increase of 290.7 percent is unparalleled, with Lithuania (227.7 percent) and the Czech Republic (214.3 percent) trailing behind.
In a recent episode of a podcast by Pénzcentrum, experts delved into the age-old question of renting or buying a home that many students and their families face. This dilemma becomes particularly pressing after university admission results are released, as students need to secure housing, often far from home.
Renting vs. buying: The debate
Renting or buying? A pressing question for students. Photo: depositphotos.com
With high rental prices across Hungary, particularly in major cities like Budapest, the question of whether to rent or buy is crucial. Although renting may seem cheaper initially, Palkó István, a credit market expert, suggests that buying might be more beneficial in the long run—even if it involves taking out a mortgage, Pénzcentrum writes.
Current market conditions
Rental prices vary widely across different areas. In smaller university towns like Szeged, Veszprém, and Pécs, and in some of the cheaper districts of Budapest, monthly rents for a 50-60 square meter apartment range from HUF 150,000 to 160,000. In contrast, in the more expensive districts, especially in Buda, rents can reach HUF 250,000 to 280,000 or more.
Cost of buying
Currently, a small one-bedroom apartment in Budapest costs around HUF 40 million. With a 20% down payment, the monthly mortgage payment would be approximately HUF 240,000 to 260,000. While this is higher than some rental prices, the potential long-term benefits could outweigh these initial costs.
A detailed analysis compared the costs of renting versus buying over a five-year period. Starting with a monthly rent of HUF 166,667 and a mortgage payment of HUF 242,017, the analysis assumed a 20% down payment. It noted that students typically lack sufficient income to qualify for a mortgage themselves, so the loans are usually taken out by parents.
Over the five years, while the rental payments are expected to increase by 6.5% annually, the mortgage payments remain fixed due to a stable interest rate environment. By the end of this period, the rent would rise to HUF 214,411 per month, slightly less than the mortgage payment.
Long-term gains from buying
The key advantage of buying is the potential for property value appreciation. The analysis estimated that a property purchased for HUF 40 million could be sold for around HUF 54.8 million after five years, taking into account a similar 6.5% annual increase in property values. After repaying the remaining mortgage balance, this would leave the owner with approximately HUF 27.5 million, more than three times the initial HUF 8 million down payment.
Investment comparison
If a student or their family chooses to rent and invests the difference between the rental cost and what they would have paid for a mortgage, assuming a similar 6.5% annual return, the investment would grow to around HUF 14.9 million after five years. This amount, however, is still significantly less than the potential gains from property ownership.
Conclusion
The current market analysis suggests that, despite the higher initial costs, buying a property could offer greater financial benefits than renting. However, the decision depends on individual circumstances, including financial stability and future housing needs.
The 2022 international home construction crisis reached Hungary. The market of newly built properties is concentrated in Budapest, its suburbs, and Lake Balaton. The average sqm price is EUR 3410 in Budapest, 3% higher than last July.
Based on the data of ingatlan.com, there were more than 8,000 newly built properties for sale in July. László Balogh, an expert in the market segment, said the prices were at the edge of solvent demand. The average sqm price in the county seats is at EUR 2,238, index.hu wrote. Furthermore, the market still waits for the investors’ return.
Here are the prices
The number of completed homes was down by 18 percent year on year in the first half of 2024, at 6,027, the Central Statistical Office (KSH) said on Wednesday.
Building permits issued in the period were also down by 18 percent, at 8,972, KSH said.
Budapest saw the completion of 2,124 new homes, down by an annual 8.3 percent. Home constructions were down year on year by 20 percent in county seats, 27 percent in other cities and 19 percent in other localities, KSH said.
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How the rental market is shaping up in Hungary after the announcement of university admission scores – Read more HERE
After today’s announcement of university admission scores, a new wave of excitement hits prospective first-year students and their families, with a pressing question: where will they live during their studies?
In Szeged, the anticipation had already stirred activity around rental properties even before the scores were revealed, Világgazdaság writes. Gabriella Szil, head of the Belvárosi Real Estate Office, noted that the limited availability of dormitory spaces in Szeged drives students towards renting apartments. Unlike previous years, when many parents purchased apartments for their university-bound children, this year shows a shift towards renting.
However, the demand has driven up rental prices. Currently, renting an apartment in Szeged costs 20-25% more per month than last year. Hungarian families typically seek more affordable rentals, ideally under HUF 140,000 (EUR 357) per month.
In contrast, foreign students studying in the city are willing to pay higher prices. They generally rent properties within the city’s central ring, close to the university, often based solely on video tours. The GDN office in Szeged expects a surge in the market and is prepared for the rush.
Rents in Kaposvár and Szombathely
Kaposvár, on the other hand, experiences little fluctuation in the market due to student arrivals. According to Zita Zsobrák, sales manager at Kaposingatlan, the university campus can accommodate most students, resulting in few seeking rentals or purchases specifically because of their studies.
Similarly, in Szombathely, the rental market is more influenced by migrant workers rather than students. While some students do seek out rentals, they generally prefer to purchase properties, as noted by Ernő Gombos, owner of the local GDN office.
Real estate market in Debrecen
Debrecen’s real estate landscape has been significantly shaped by industrial development. The influx of workers requires adequate housing, and with restrictions on worker dormitories, many turn to renting apartments. This demand keeps the rental market vibrant, even before the influx of students, driving up prices.
In Debrecen, the market is clearly a seller’s market, with rental prices ranging from HUF 180,000 to 230,000 (EUR 458 to 585). Dávid Préda, owner of PREDA SIP Real Estate, mentioned plans to offer property management services due to the high demand for well-conditioned properties, which often get rented out quickly without advertising. They also aim to assist renters, particularly young people, who may not fully understand their rights as tenants.
The Miskolc market
The Miskolc university campus, rich in dormitory spaces, generally keeps rental demand steady. However, properties near the Avas area, close to the university, are an exception, as pointed out by Gáspár Zsolt Hajdú, head of the Demeter Real Estate Center. Some investors target these areas specifically for student rentals, while others have seen foreign students opting for properties further from the campus due to direct transport links.
The situation in Pécs
In Pécs, the trend leans more towards renting than purchasing properties, as stated by László Marosvári, owner of the local GDN office. The rental market in Pécs is diverse in terms of price and amenities, with international students willing to pay more for well-equipped, often new or renovated apartments with balconies. Rent prices typically range around HUF 3,000-4,000 (EUR 7.63-10.17) per square meter.
Rental prices in Budapest
Even before the announcement of admission scores, rental prices in Budapest began to rise. Students primarily look for small studios or share larger apartments, according to Anna Radics, sales manager at Your Home in the I District, part of the GDN network. Radics highlighted a shift from short-term rentals to long-term leases, bringing many well-furnished, centrally located apartments onto the rental market.
This shift has made it difficult to find quality rental properties at a good price if they’re not modern and well-equipped. Many properties are newly built or significantly upgraded, with rents ranging from HUF 200,000 to 300,000 (EUR 509 to 763) per month. The trend shows that finding cheaper, quality rental housing in the capital is increasingly challenging.
In June, rent prices continued to increase in Hungary. The national average increase was 1.9%, while that rate was 1.6% in Budapest. If you want to buy a newly-built apartment in the capital, you must collect a lot of money since the average sqm price starts at EUR 3,800 in 2024.
Rent prices grew, Budapest is still the most expensive
Based on the joint rent price index compiled by the Hungarian Statistical Office (KSH) and ingatlan.com, the annual growth (compared with last June) was 10.3% on a national level. In Budapest, the increase was 9.9%. Compared to 2015, rental prices doubled in Hungary.
In Budapest, flats are typically for rent instead of houses, and 43% of the advertisers are private individuals. That rate is 42% in the Hungarian capital.
In Budapest, in H1 2024, the average rental price was HUF 250 thousand (EUR 636) per month. North Hungary, with counties like Borsod-Abaúj-Zemplén, Heves and Nógrád counties, is the cheapest concerning rental prices with only HUF 129 thousand per month, infostart.hu wrote.
Source: depositphotos.com
László Balogh, a senior expert of ingatlan.com, said that 85% of the flats and houses for rent are in Budapest and the county seats (Győr, Székesfehérvár, Debrecen, Szeged, etc.). In Budapest, the offer shrunk in the last few weeks, he added.
The sqm price for newly-built apartments is shockingly high
Based on OTP’s latest survey, in 2024 H1, the Budapest newly-built property market showed significant growth. The supply rose by 90% while traffic doubled. That is because of the increasing demand, the growing real wages, the lower inflation, and the relatively low property loan interests. The number of people aiming to invest in a newly built property also increased, liner.hu wrote.
The new flats sold reached 3,500 in Budapest by the end of June, a 2.5-fold rise compared to 2023 H2. Based on OTP Jelzálogbank data, the activity of the investors remains the highest in Budapest’s 13th district. More than 1,000 newly built apartments were put on sale in Angyalföld in the last six months.
Many people run into red lights because of the high rent and property prices in Budapest. Photo: facebook.com/karacsonygergely
Dávid Valkó, a senior analyst of OTP Jelzálogbank, said the average price per sqm in Budapest is HUF 1.52 million (EUR 3,869). But there are apartments where that price reaches HUF 4.5 million (EUR 11,454).
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The price of an average panel apartment in Budapest is shockingly high – Read more HERE
Average prices on Lake Balaton property market exceeded those in Budapest – Details in THISarticle
It costs around HUF 41 million (EUR 104,320) to buy a livable 53-square-metre panel apartment in Budapest, but in the most popular residential areas, potential buyers can expect to pay even more, up to around HUF 1 million (EUR 2,540) per square metre, according to Duna House.
Following the moderation of prices seen last year, 2024 will bring another price rise for buyers looking for an apartment in Budapest. The renewed home creation subsidies and the decreasing housing loan interest rates have had a positive effect on the buying mood, so the average square metre price paid for a panel apartment in Budapest has risen by 9 per cent to HUF 765,000 (EUR 1,920) following the increased interest. In some areas, the price increase for an apartment in Budapest is 14 per cent, and prices in the range of millions of HUF per square metre are not unimaginable in the future.
After the easing of prices in the past year, 2024 will bring a price increase in the residential housing market in the capital, as renewed home-building subsidies and falling interest rates on housing loans have boosted demand, Telex reports.
“What was missing in 2023 has now been made up for in Budapest, as the average price per square metre of a panel apartment is 7 per cent higher this year than it was in 2022 when the price of a panel apartment was HUF 717,000 (EUR 1,824),” said Károly Benedikt, head of PR and analysis at Duna House.
The price of a panel apartment in Budapest
Wikimedia Commons by Andor Elekes
Of the 12 housing estates surveyed, Óbuda had the largest price decrease in 2023, and this year prices have increased the most here. While the average price per square metre in 2023 was 30% higher than in 2022, buyers can expect to pay HUF 880,000 (EUR 2,240) per square metre.
The average price per square metre is approaching HUF 1 million this year in District XI and in the Vizafogó residential area in District XIII. In the former, after a 12 per cent increase, the unit price has risen to HUF 941,000 (EUR 2,400), while in the latter, after a 16 per cent rise, the average amount spent on a property is HUF 936,000 (EUR 2,380) per square metre.
In 2024, apartments in the József Attila housing estate will be available at a slightly lower price of HUF 839,000 (EUR 2,130), a 16 per cent increase compared to last year. After an 8 per cent increase, the average price of panel apartments on Füredi Street is HUF 829,000 (EUR 2,110). In Újpest, the average price is slightly less, and in the Havanna housing estate, you can buy a flat for HUF 644,000 already. In Újpalota, the average price per square metre is HUF 663,000 (EUR 1,690), with almost a quarter of all panel transactions in the capital occurring here in the first half of this year.
In the better-known, larger housing estates, prices have risen even more than the capital’s average, with an average increase of 14 per cent in the price per square metre compared to last year. While in 2023, prices in five housing estates decreased by between 3-20 per cent, this year only the housing estate in Újpalota has seen a 5 per cent decrease.
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Renting an apartment in Budapest is almost a luxury: prices approach those in Madrid – Read here
Real estate market: Average price of newly built apartments in Budapest shockingly high – Read here
Budapest is likely to undergo a major transformation in the near future. Hundreds of thousands of square meters of office space are expected to become available in Budapest as state organisations relocate to new premises. This presents a prime opportunity for property owners to renovate and increase property value by converting them into apartments or hotels.
The latter is particularly beneficial for diversifying the hotel market, according to a June report by Newmark VLK Hungary.
Budapest’s transformation from offices to hotels
https://www.facebook.com/agorabudapestoffices/
Over the next two to three years, various government offices will vacate downtown buildings. Property owners must decide how to repurpose the newly available space, which requires financial investment but also offers opportunities for development, noted experts from Newmark VLK Hungary, as reported by Economx.
Initial steps include thorough technical assessments and real estate market evaluations to determine future use. While some buildings may remain as offices, there’s a growing interest in converting them into residential apartments or hotels, a trend already seen in Western Europe and the United States, including Budapest.
The uncertainty in the office market may prompt owners to consider new functionalities, especially due to strong demand in the hotel and residential sectors. Factors like easier conversion of downtown office spaces into smaller units compared to new developments outside the city centre are also considered.
Demand is increasing for accommodations
Photo: wing.hu
According to hotel market expert Róbert Székely, there’s increasing demand for accommodations, supported by forecasts indicating growth in European hotel revenues through 2025. With limited greenfield investment opportunities in downtown areas, developers are turning to repurposing existing buildings like offices or residential complexes for hotel development.
Recent shifts include a move from short-term to long-term lease contracts, providing owners greater stability in revenue, despite higher perceived risk from banks due to single-tenant arrangements in these transformed properties.
Budapest to attract more tourists thanks to these transformations
Overall, these transformations are expected to broaden Budapest’s hotel offerings, potentially attracting more tourists and benefiting both tourism and infrastructure development. Four-star hotels are particularly favoured among business travellers and individual tourists, typically profitable in central districts where tourism is concentrated.
Outside central areas, transformed buildings may cater to lower-priced hotels or alternative accommodations like youth hostels, apartment hotels, or mixed-use facilities appealing to budget-conscious or younger travellers willing to explore further for lower rates.
