Authored by the expert who managed and guided the team behind the Hungary Property Pack
Yes, the analysis of Budapest's property market is included in our pack
What will happen in Budapest’s real estate market? Will prices rise or fall? Is the city still a prime location for international investors? How are Hungary’s government policies and taxes shaping the real estate landscape in 2025?
We’re frequently asked these questions because of our deep involvement in this market. Through our collaborations with local real estate agents, property developers, and international buyers, we’ve gathered firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Budapest’s property prices will dip slightly as rising interest rates make borrowing costlier
Interest rates are climbing, making it pricier to borrow money for a home.
In Budapest, this shift is clear. As borrowing costs rise, fewer people can afford new homes, which means demand is dropping. This isn't just a city issue; the countryside is feeling it too, with a 15% drop in buyer interest.
When interest rates go up, property prices usually come down. It's a pattern we've seen before. In 2023 and 2024, Budapest saw a 9% decrease in buyer interest, showing how sensitive the market is to these changes.
Surveys from that time showed that even though incomes were rising, affordability was still a big concern for potential buyers. People were hesitant to buy, and this was reflected in the numbers.
In Budapest, the house price-to-income ratio dropped by 4.1%, indicating that homes were becoming slightly more affordable compared to incomes, but not enough to boost buying intentions.
Sources: MNB Housing Market Report 2024, Trading Economics, The Wandering Investor
2) Foreign buyers will target short-term rentals as Budapest's tourism industry grows
Budapest's tourism is booming, with a 23% increase in visitors by early 2024 compared to the previous year.
This surge is making short-term rentals, like those on Airbnb, a hot commodity. Properties are booked for an average of 274 nights a year, showing just how popular they are with tourists.
On average, hosts in Budapest are seeing annual earnings of around €18,000 from these rentals, thanks to the city's bustling tourism scene.
Foreign investors are eyeing Budapest's real estate market, drawn by the city's thriving tourism industry and the potential for lucrative short-term rental income.
In 2023, Hungary saw approximately 16 million tourists, which significantly boosted tourism accommodation revenue by 23%.
Budapest's economic vitality and tourism growth make it an attractive spot for those looking to invest in short-term rental properties.
Sources: Budapest Adventures, ETIAS, Airbtics
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Hungary versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) City center yields will drop as property prices increase faster than rents
Property prices in Budapest's city center have been climbing rapidly, making it more expensive to own a home.
In 2023, the cost of newly built flats jumped by 13.9%, averaging 3,260 euros per square meter. This surge highlights the growing expense of buying property in the heart of the city.
Meanwhile, rental rates aren't keeping pace. In August 2023, rents in Hungary rose by 12.43%, but after adjusting for inflation, they actually fell by 3.43% nationally and 3.27% in Budapest. This means that even though rents are increasing, they aren't matching the speed of property price hikes.
Historically, Budapest has seen rental yields drop as property prices rise. In the second quarter of 2023, gross rental yields varied from 3.5% to 8%, with an average of 5.12% across the city. This pattern suggests that as owning property becomes pricier, the returns from renting out these properties might shrink.
Sources: Global Property Guide, Hungarian Conservative
4) Budapest’s property prices will keep rising because demand is high and supply is low
Budapest's residential property prices are on the rise due to limited supply and high demand.
In 2023 and 2024, there was a 30% increase in property transactions by the end of the first quarter of 2024, showing strong buyer interest. When there aren't enough homes to go around, prices naturally climb.
New homes are hard to come by. In the latter half of 2023, only 1,390 new homes were sold, a sharp 50% drop from the previous year. This scarcity means existing homes are hot commodities, pushing prices even higher.
Government policies are also stirring the pot. Investments through government bonds and pension savings are expected to add over HUF 1,000 billion to the market, driving demand and prices up. Foreign investors are eyeing Budapest too, with projections of over HUF 1,000 billion in investments by 2025.
Budapest is still a bargain compared to other European cities, making it a magnet for both local and international buyers. Hungary's economic growth is boosting purchasing power, adding to the rising demand for homes in the city.
Sources: Daily News Hungary, MNB Housing Market Report
5) Property prices in Budapest will rise steadily due to foreign investment and economic growth
Budapest's property prices are steadily climbing, thanks to foreign investment and economic growth.
In 2023, Hungary attracted a whopping EUR 13 billion in foreign direct investment, more than doubling the previous year's record. This influx was largely fueled by Asian investors, who made up nearly 82% of the total investment. Such a massive injection of foreign capital is a key driver behind Budapest's booming real estate market.
Property prices in Budapest are on the upswing, with the average cost of a new apartment hitting HUF 79 million in 2024, an increase of HUF 7.9 million from 2023. The city's lively culture, expanding job market, and the arrival of multinational companies make it a prime spot for living and real estate investment.
Budapest is also becoming a magnet for international students and professionals, which is pushing up rental prices and boosting demand for rental properties. This growing demand, along with ongoing urban development projects, is expected to further elevate property prices.
With its strategic location and vibrant lifestyle, Budapest is increasingly appealing to foreign investors. The city's economic growth and urban development are creating a dynamic environment that is likely to sustain the upward trend in property prices.
As more multinational companies set up shop in Budapest, the job market is expanding, attracting a diverse workforce. This influx of talent is not only driving demand for housing but also contributing to the city's economic vitality.
Sources: HIPA, Daily News Hungary, CRWW Group
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6) Rents in Budapest will rise as it becomes more popular with expats
Budapest is becoming a hotspot for expatriates, and rental prices are on the rise.
In 2023, the Hungarian Central Statistical Office noted that around 98,000 foreign nationals now call Budapest home, with many coming from Ukraine and China. This influx is naturally pushing up the demand for rental properties. The central districts, especially the 5th and 6th, are buzzing with international residents, where nearly 25% of the population is from abroad, making these areas prime real estate for rentals.
Big international companies like MSCI, which has over 500 employees in Budapest, are also adding to the housing demand. Professionals moving to the city for work are looking for places to live, and this is driving rental prices even higher. Expatriates often prefer renting over buying, especially in a rapidly growing city like Budapest, which adds more pressure on the rental market.
Budapest is also seeing a rise in international schools and services tailored for expatriates, which shows a growing community. This, in turn, boosts the demand for housing. The city is frequently highlighted in media as an attractive spot for expatriates, thanks to its vibrant cultural and social scene that caters to international communities.
With more cultural and social events targeting foreigners, Budapest is becoming increasingly popular among expatriates. This popularity is reflected in the steady increase in rental prices, as more people are drawn to the city's unique charm and opportunities.
Sources: Hungarian Conservative, MSCI Careers, MNB Housing Market Report, Helpers.hu
7) Demand for senior-friendly housing in Budapest will grow as the population ages
In Hungary, 20.50% of the population is now aged 65 and over, and this number is on the rise.
With people living longer, life expectancy is projected to hit 77.59 years by 2025, creating a need for homes that cater to older adults. In bustling cities like Budapest, the demand for senior-friendly housing is even more pronounced due to urbanization.
Older adults are increasingly looking for homes that are accessible, affordable, and supportive. This shift is driving significant growth in Hungary's senior housing market, as developers respond to these preferences.
The senior housing sector is booming, with absorption rates doubling compared to pre-pandemic times. This trend highlights the urgent need for more senior-friendly living spaces.
In urban areas, the concentration of elderly residents is higher, pushing the demand for housing that meets their needs. This is especially true in Budapest, where the aging population is more prominent.
As the population ages, the housing market is adapting, with a focus on creating environments that support the needs of older adults. This includes features like step-free access and community support services.
Sources: Trading Economics, Macrotrends, NIC MAP Vision
8) Demand for home office spaces will grow as remote work becomes more popular
Remote work is booming in Hungary, with a jump from 36,000 remote workers in 2019 to over 151,000 in 2023.
In Budapest, this shift means people are looking for bigger homes with space for a home office. Companies like Building Budapest Tailor Hungary are leading the way, focusing on refurbishing homes to include these functional office spaces.
When browsing real estate listings in Budapest, you'll notice home offices are a hot selling point. This trend is not just a marketing gimmick; it's a response to what buyers want—spaces that boost productivity and offer a better work-life balance.
Social media and news outlets are buzzing about the perks of having a dedicated home office. People are sharing how it helps them stay productive and manage their work-life balance more effectively.
As remote work becomes the norm, the demand for homes with office spaces is only going to grow. This is a clear sign that homebuyers are prioritizing properties that support their new work-from-home lifestyle.
So, if you're considering buying property in Budapest, keep an eye out for homes that offer these modern amenities. They’re not just trendy; they’re becoming essential for today’s remote workers.
Sources: Statista, Building Budapest, Himalayas
We have made this infographic to give you a quick and clear snapshot of the property market in Hungary. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) The outskirts of Budapest will gain appeal as remote work becomes more common
Remote work is reshaping where people want to live, and the outskirts of Budapest are becoming a hot spot.
Central Budapest's property prices are soaring, with costs reaching up to €5,000 per square meter. This makes the outskirts a more budget-friendly choice for homebuyers. People are drawn to these areas not just for the price, but for the chance to own a larger home.
In 2023, over 151,000 people in Hungary worked remotely, and many are on the hunt for homes with extra space for a home office. The outskirts of Budapest offer more room, making them ideal for those who need a dedicated workspace.
The Hungarian government is also stepping up by enhancing infrastructure. They're extending metro lines and linking suburban rail services to the metro, which means commuting from the outskirts to the city center is getting easier. This makes suburban living more appealing without losing city access.
For those considering a move, the outskirts of Budapest offer a blend of affordability, space, and convenience. As remote work continues to grow, these areas are set to become even more desirable.
With these developments, it's no wonder that the outskirts are catching the eye of potential buyers. The combination of lower prices, larger homes, and improved transport links is a winning formula.
Sources: Hungary Golden Visa, Statista
10) Demand for flexible living spaces in Budapest will rise as more digital nomads move in
The number of digital nomads is skyrocketing, and it's reshaping cities like Budapest.
In the US, digital nomads have more than doubled from 2019 to 2022, and this trend is expected to continue. Budapest is catching the eye of these remote workers, ranking ninth globally as a top spot for digital nomads in 2023.
Why Budapest? It's simple: affordability and quality of life. The city offers coworking spaces at about USD 211 per month, which is cheaper than in Prague or Vienna. Plus, Budapest is safe, has fast internet, and a vibrant cultural scene, making it a magnet for digital nomads.
Budapest's infrastructure is also a big draw. By 2022, Magyar Telekom had upgraded 60% of its mobile stations and expanded its 5G network. This means fast, reliable internet, which is a must-have for remote workers.
All these factors are driving up the demand for flexible living arrangements in Budapest. Digital nomads are looking for short-term rentals and furnished apartments, making the city a hot spot for property investment.
Sources: Pumble, Robin Waite, Budapest Business Journal
11) Luxury property prices in Budapest will rise as more foreign buyers enter the market
Foreign buyers are increasingly eyeing Budapest's luxury real estate market.
In 2023, foreign investors snapped up 8,000 homes in Hungary, a notable 38% jump from the previous year. This surge is fueled by favorable exchange rates and new regulations that make investing in Budapest more appealing. The city’s charm and potential for high returns are hard to resist.
By 2024, foreign nationals made up 9.1% of all property buyers in Budapest. In the bustling inner districts of Pest, this figure soared to 22%, showing a clear preference for central locations. Here, foreign buyers were responsible for 28% of the total transaction value, highlighting their significant impact on the market.
The demand for luxury properties is particularly intense. The XI district, for instance, saw the highest sales of new apartments, with an average price tag of HUF 101 million. This area is becoming a hotspot for those seeking upscale living.
Budapest's property market is on fire, with the average cost of a new apartment hitting HUF 79 million in 2024. This is a 26% increase over the national average, reflecting the strong demand and potential for capital appreciation. The limited supply of new homes is pushing prices even higher, making the market fiercely competitive.
For those considering an investment, Budapest offers a promising opportunity. The city’s blend of culture, history, and modern amenities, coupled with its thriving real estate market, makes it an attractive choice for foreign investors looking to capitalize on its growth.
Sources: Real Estate Market in Budapest: Trends for 2024-2025, Hungarian Residential Properties Attractive for Foreign Investors
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12) Demand for modern apartments in Budapest will rise as more young professionals move in
Budapest is quickly becoming a hotspot for young professionals due to its thriving tech and startup scene.
From 2021 to 2023, the city's tech ecosystem experienced a 41% growth in value, especially in fields like AI, Big Data, and Fintech. This boom has drawn a talented crowd and sparked a surge in startup activity, turning Budapest into a lively innovation hub.
The Hungarian Innovation Agency plays a key role by supporting startups with fewer regulatory hurdles and early-stage funding. In 2023, their Startup Factory program injected $15.9 million into tech incubators, making the city even more attractive to entrepreneurs. This hasn't gone unnoticed, as multinational companies are setting up shop in Budapest to access this growing talent pool.
Budapest also offers enticing perks for young professionals. The Digital Nomad White Card is a game-changer, especially for non-EU citizens looking for a friendly and affordable place to live and work. This initiative, along with tax breaks, makes Budapest a strategic choice for startups and remote workers.
With these developments, it's no surprise that Budapest is seeing an influx of young professionals, increasing demand for modern apartments. The city's vibrant culture, combined with its business-friendly environment, makes it an ideal place for those looking to balance work and life.
Sources: Startup Genome, Mighty Travels
13) Demand for homes near green spaces and fitness centers will grow as wellness becomes more important
In 2023 and 2024, there's been a noticeable shift towards wellness-focused real estate developments.
In Budapest, properties near parks and green spaces are in high demand. This is because green spaces are linked to better mental and physical health, making them a top priority for many homebuyers. Imagine living near the lush City Park or the scenic Margaret Island, where you can enjoy a morning jog or a peaceful afternoon walk.
People are also looking for homes with fitness amenities. In Budapest, the presence of places like Life1 Fitness and the 24/7 Marriott Fitness Center shows just how much residents value having fitness options close by. These facilities offer everything from yoga classes to state-of-the-art gym equipment, catering to a variety of fitness needs.
Consumer surveys reveal a strong preference for homes that offer these wellness features. It's not just about having a gym nearby; it's about the lifestyle that comes with it. Access to fitness centers and wellness facilities is becoming a key factor in choosing where to live.
The wellness real estate market has grown by 195% since 2019, and it's expected to keep growing at an annual rate of 15.8% until 2028. This growth is driven by the increasing focus on health and well-being, which is reshaping the real estate landscape.
As more people prioritize wellness, the demand for properties with access to green spaces and fitness facilities will continue to rise. This trend is not just a passing phase; it's a reflection of a broader shift towards healthier living environments.
Sources: Global Wellness Institute, XpatLoop
14) Demand for affordable rentals near universities will grow as student populations increase
Budapest's student population is booming, especially in the 2023/2024 academic year.
With nearly 190,000 students enrolled in higher education, the city is buzzing with young energy. This surge naturally means more students are on the hunt for housing, particularly close to universities where they spend most of their time.
Universities like Eötvös Loránd are pulling in more international students by offering diverse programs. This influx of students from abroad is pushing up the demand for rental properties even further, as they often want to live near their campuses.
There's a buzz about a shortage of student accommodation in Budapest, which is making the housing market even tighter. Many students are opting for off-campus housing, which tends to be more affordable and offers more flexibility than living on campus.
With this trend, landlords and property investors are seeing opportunities. The gap between supply and demand is a clear signal that there's room for more rental properties, especially those catering to students.
As the student population continues to grow, the demand for affordable rentals near universities is only going to increase. This is a chance for savvy investors to tap into a market that's ripe for development.
Sources: Statista, Eötvös Loránd University, FHFA, Budapest Metropolitan University
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.