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 is happening in Budapest’s real estate market? Are prices on the rise or decline? Is the city still a magnet for international investors? How are Hungary’s government policies shaping real estate taxes and regulations in 2025?
These are the questions we hear every day from professionals, buyers, and sellers across Budapest and beyond. Maybe you’re curious about the same things.
We know this because we stay closely connected with local experts and people like you, exploring the Budapest real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
How this content was created 🔎📝
1) Foreign buyers will increasingly target Budapest properties due to favorable exchange rates
Budapest is catching the eye of foreign buyers, thanks to favorable exchange rates.
In 2023, foreign buyers snapped up 8,000 homes in Budapest, a jump of 38% from the previous year. This boom was fueled by the weakening Hungarian Forint against the euro, making properties more affordable for international investors.
As 2024 rolled in, the Forint continued its slide, keeping Budapest attractive to foreign investors. Real estate agencies noticed a spike in interest, especially from Germany and Austria. Many inquiries came from retirees looking to enjoy Hungary's cost benefits.
The Hungarian government sweetened the deal by offering a ten-year residence permit for non-EU and non-EEA citizens who buy property. This, along with predictions of ongoing favorable exchange rates, keeps Budapest on the map for foreign real estate investment.
With these incentives and economic trends, Budapest is set to remain a hotspot for foreign buyers looking for a good deal.
Sources: XpatLoop, Daily News Hungary, The Wandering Investor, Connect Budapest
2) Suburban property prices will grow more slowly than those in central districts
Suburban areas in Budapest are likely to see slower price growth compared to central districts due to several key factors. One major reason is the rising demand for urban living, especially among young professionals who are drawn to city centers for better job opportunities and modern amenities. This trend was evident in the past, with a significant portion of emigrants to Budapest being under 40 and well-educated.
Additionally, central districts have been experiencing higher rental yields, as seen in the 12.55% increase in apartment rents in 2023. This indicates strong demand for city living, which naturally drives up property prices in these areas. Historical data also supports this, showing that property prices in Budapest's central areas have appreciated faster than those in the suburbs over the years.
Moreover, the Hungarian government's investment in infrastructure, such as the Budapest Railway Node Strategy, has improved connectivity and reduced commute times, making central living even more attractive. Consumer surveys further reveal a preference for central locations due to proximity to work and social activities, which continues to fuel demand and price growth in these districts.
Sources: Daily News Hungary, Budapest Invest
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) Budapest’s growing popularity as a tourist spot will boost foreign interest in luxury properties
As Budapest has become a more popular tourist destination, foreign interest in luxury properties has grown significantly. In 2022, nearly 6.9 million tourists visited Budapest, and this trend continued with 5.3 million in 2023. The city saw a 23% increase in guests in early 2024 compared to the same period in 2023, indicating a strong upward trend in tourism.
This surge in tourism has positively impacted the real estate market, with foreign real estate buyers increasing by 36% since 2020. The average cost of a new apartment in Budapest rose to HUF 79 million in 2024, up by HUF 7.9 million from 2023. This growth is supported by the city's appealing golden visa program and favorable economic conditions.
Moreover, the Hungarian government has launched initiatives to promote Budapest as a tourist hotspot, investing 15 billion forints to enhance hospitality services. This has further increased Budapest's appeal, making it an attractive destination for both tourists and investors. The city's rich cultural heritage, high quality of life, and modern infrastructure are highlighted in media reports, drawing more luxury travelers and investors.
Sources: Budapest Adventures, World Estate, CRWW Group, Hungarian Conservative
4) Budapest’s residential property prices will stabilize following a period of rapid growth
In 2023 and 2024, Budapest saw a significant increase in the supply of new residential developments. By mid-September 2023, over 8,100 new apartments and houses were available for sale, a number not seen in over 15 years. This influx of new properties helped keep prices in check, preventing them from skyrocketing further.
Interest rates in Hungary hit 15.3% in 2023, making it tougher for people to get mortgages. This naturally led to a dip in demand, causing prices to stabilize. Additionally, the government capped mortgage interest rates at a maximum of 5%, which was expected to help stabilize the market by making mortgages more affordable.
There was also a noticeable decrease in foreign investment, with a roughly 60% drop in the number of sales for used residential properties. This suggested a stabilization or decline in foreign investment. Consumer surveys showed that fewer people were looking to buy properties, with 2023 seeing a notably low number of transactions, contributing to price stabilization.
Sources: Hungarian Conservative, Golden Visa Lawyers, Mhomes
5) Virtual reality tours will increasingly feature in property marketing to attract tech-savvy buyers
Virtual reality tours have become a staple in property marketing, especially appealing to tech-savvy buyers. Back in 2023 and 2024, the virtual tourism market was already on a rapid growth trajectory, expanding from $10.52 billion to $12.38 billion, with projections to reach $23.9 billion by 2028. This growth was fueled by technological advancements, such as AI-powered 3D virtual tours, which significantly improved the quality and accessibility of these experiences.
Consumer preferences have also played a crucial role in this shift. Surveys from the past indicated that more than 50% of adults had taken a virtual tour, and a significant 67% of home buyers expressed a desire for virtual tours when considering property listings. This preference was particularly strong among tech-savvy buyers, who were more likely to engage with listings that offered immersive virtual experiences.
Moreover, the effectiveness of virtual reality tours in enhancing buyer engagement and decision-making was evident. Buyers spent considerably more time on websites featuring virtual tours, and a substantial percentage of them would not even consider viewing a property in person if a virtual tour was not available. This trend was further supported by the increasing availability of affordable VR equipment, making it easier for consumers to access and enjoy these virtual experiences.
Sources: PhotoUp, GlobeNewswire
Get fresh and reliable information about the market in Budapest
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
6) Budapest will attract more foreign investors as it becomes recognized as a European tech hub
Budapest is quickly becoming a hotspot for tech innovation in Europe, drawing in more foreign investors.
In recent years, tech startups and major companies have flocked to Hungary, thanks to its business-friendly environment and government backing. The Hungarian government has been proactive, offering tax breaks and subsidies to attract both local entrepreneurs and international tech giants like Bosch, Nokia, and Microsoft. These incentives have led to a surge in foreign direct investment, fueling innovation and growth in the tech sector.
Budapest's real estate market is also catching the eye of foreign investors, especially in areas buzzing with tech activity. The demand for office space is climbing as the city's tech industry expands, making it an attractive spot for international investors. The influx of tech conferences and events in Budapest further cements its status as a tech hub, drawing industry professionals and investors from around the globe.
With more international media spotlighting Budapest's tech scene, the city is poised for even greater recognition. This increased visibility is likely to attract more foreign investors, eager to tap into the burgeoning opportunities in Hungary's tech landscape. As Budapest continues to grow as a tech hub, the real estate market is expected to thrive, offering lucrative prospects for those looking to invest in property.
For those considering buying property in Hungary, now might be the perfect time to explore the vibrant tech districts of Budapest. The city's transformation into a tech powerhouse is not just a trend but a sustained movement, promising long-term benefits for investors. Budapest's appeal as a tech hub is undeniable, and its real estate market is set to benefit from this ongoing evolution.
Sources: Daily News Hungary, Nandbox
7) Regulatory changes will simplify the process for foreign buyers to acquire residential properties
In recent years, regulatory changes have made it easier for foreign buyers to purchase residential properties in Budapest. One of the key changes was the introduction of the Golden Visa program, which allows foreigners to obtain a 10-year residence permit by investing in the country’s economy, including purchasing residential property. This program has significantly reduced restrictions for foreign investors.
Additionally, the process of purchasing property has been streamlined. Foreign buyers must obtain permission for real estate purchases, but this is typically handled by a lawyer, making the process more straightforward. The Hungarian government has also introduced various tax incentives, such as tax breaks on rental income, which make investing in Budapest more attractive.
These changes have led to a noticeable increase in foreign property transactions. In 2024, foreign buyers accounted for a significant percentage of property transactions in Budapest, particularly in the inner districts of Pest. This trend is supported by increased inquiries from international clients and positive feedback from foreign buyers who have experienced improved purchasing processes.
Sources: Immigrant Invest, World Estate, CRWW Group
8) Government initiatives will boost affordable housing project development
Government initiatives are boosting affordable housing in Budapest.
Thanks to increased funding from EU structural funds, Budapest's municipal housing programs are seeing a surge in affordable housing projects. This financial backing is crucial for getting these projects off the ground.
The Budapest Assembly has also stepped up by approving a comprehensive proposal package to make housing more affordable. This package aims to expand the affordable rental sector and make better use of existing real estate. By easing zoning restrictions, it's now simpler to develop affordable housing.
Moreover, the government is teaming up with private developers, offering capital funding and subsidized loans. These partnerships are encouraging the construction of affordable housing units, boosting the municipal rental stock. It's a win-win, ensuring a steady supply of affordable homes.
Sources: Budapest Assembly Adopts Package to Ensure Affordable Housing, Hungary A - Economy and Finance, Budapest City Council Adopts New Measures for Affordable Housing
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) New short-term rental rules will affect the profitability of Airbnb-style investments
In recent years, Budapest has seen a significant rise in short-term rental listings, with over 10,000 active Airbnb listings as of late 2024. This growth has been driven by a high occupancy rate, with properties typically booked for 274 nights a year. However, changes in local government regulations are set to impact this trend.
Starting in 2025, the annual flat tax on short-term rentals in Budapest will increase significantly, from HUF 38,400 to HUF 150,000 per room. This tax hike is expected to reduce the profitability of these investments, as property owners will face higher costs. Additionally, a two-year moratorium on new short-term rental registrations will be implemented, preventing new properties from entering the market until the end of 2026.
These regulatory changes are similar to those seen in other cities like Barcelona, where strict regulations have already impacted Airbnb profitability. Property owners in Budapest anticipate a drop in income due to the increased tax burden and potential decrease in bookings. The average daily rate for short-term rentals is currently €71, but with these new regulations, rental yields are expected to decline.
Sources: XpatLoop, Airbtics, ShortTermRentalz
10) Young professionals moving to Budapest will boost demand for modern apartments
In recent years, Budapest has become an increasingly attractive destination for young professionals. This trend is driven by several factors that make the city appealing to this demographic.
Firstly, the growth in Budapest's tech and startup sectors has been significant. From 2021 to 2023, the city's tech ecosystem saw a 41% increase in Ecosystem Value, making it one of the top 20 European ecosystems for affordable talent. This growth is particularly strong in areas like AI, Big Data, and Fintech, which are attracting young professionals interested in innovation and entrepreneurship.
Additionally, the demand for modern apartments in Budapest has been rising. The city's real estate market is evolving to meet the needs of young professionals, with new housing projects focusing on community and environmental sustainability. These developments offer modern amenities, green spaces, and community facilities, making them highly attractive to young professionals seeking quality urban living.
Moreover, the Hungarian government has been proactive in offering incentives to attract young professionals to Budapest. These include job creation and training subsidies, which provide opportunities for employment and skill development, further enticing young talent to the city.
Sources: Daily News Hungary, Startup Genome
11) Growing student numbers will boost demand for rentals near universities
The student population in Budapest is expected to grow, leading to an increased demand for rental properties near universities. In the 2023/2024 school year, nearly 190,000 BA or BSc students were enrolled at Hungarian tertiary education institutions, with almost 11,000 PhD or DLA students. This indicates a significant number of students who may require housing.
Moreover, Hungarian universities have seen a surge in enrollments, with 94,785 out of 126,449 new applications accepted in the fall semester of 2023, marking a 28% increase compared to the previous year. This growth in student numbers suggests a rising need for accommodation options.
Additionally, the Hungarian government and universities have been actively promoting higher education accessibility, with a large proportion of students starting their courses on scholarship. This welcoming approach is likely to attract more international students, further increasing the demand for rental properties near universities.
Sources: Statista, Study in Hungary
Don't buy the wrong property, in the wrong area of Budapest
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Property values on the Buda side will rise as families seek quieter, greener neighborhoods
Families are increasingly drawn to the Buda side of Budapest for its peaceful, green neighborhoods.
In Buda, property prices have surged, with new homes seeing a 113% increase in value since 2023. This rise highlights the growing interest in Buda's residential areas, especially those nestled in the hills with their scenic views and tranquil vibe.
Urban planning has been a game-changer for Buda, with more green spaces popping up, making it even more appealing to families. These developments, along with government incentives for sustainable living, have cemented Buda's status as a top choice for those seeking a quieter life.
Families are not just looking for homes; they want a lifestyle. Buda offers a unique blend of natural beauty and modern amenities, making it a prime spot for those wanting the best of both worlds.
As more families move to Buda, the demand for properties continues to rise, pushing values up and making it a smart investment choice. The area's reputation for safety and community spirit adds to its allure, drawing in those who prioritize a family-friendly environment.
With its combination of serene landscapes and urban conveniences, Buda is set to see even more growth in property values. This trend is expected to continue as more people discover the benefits of living in this charming part of Budapest.
Sources: CRWW Group
13) Suburban rental yields will drop as more people choose city center living
In Budapest, living closer to the city center is becoming increasingly popular.
Over the years, property prices in central Budapest have skyrocketed, more than tripling since 2010. By 2024, the average cost of a new apartment hit HUF 79 million, showing just how much people want to live in the heart of the city.
Why the shift? It's all about shorter commutes and easy access to amenities. People love the convenience of being near work and entertainment. Reports on lifestyle trends back this up, pointing to a growing desire for urban living.
Public transportation improvements have made city center living even more attractive. With better transit options, commuting from the city center has become a breeze, boosting demand for these properties.
Meanwhile, suburban areas are feeling the pinch. Rental occupancy rates are dropping as fewer people choose to live there. This dip in demand is pushing rental prices down, especially noticeable when the tourist season ends.
Urban development projects are pouring into central Budapest, making city center living even more appealing. Investments are focused on enhancing the urban core, leaving suburban areas less attractive by comparison.
Sources: CRWW Group, Interrelo, Hungary Golden Visa
14) Rental yields in older buildings will drop as newer developments provide superior amenities
In recent years, Budapest has experienced a notable shift in its real estate market, particularly in the rental sector. This change is largely driven by the increased construction of modern residential complexes, which offer superior amenities compared to older buildings.
Rental yields in newer developments have been on the rise, as evidenced by a 12.55% increase in apartment rents in Budapest in August 2023 compared to the previous year. This trend highlights the strong demand for modern amenities, which are often lacking in older properties.
Moreover, consumer surveys indicate that tenants, including international students and professionals, prefer modern amenities, further driving demand for newer developments. This preference is reflected in the high percentage of rental advertisements for properties in the capital during 2023.
Older buildings, on the other hand, face challenges such as infrastructure depreciation and higher maintenance costs. Frequent renovations are often required to maintain these properties, leading to increased expenses for landlords and potentially lower rental yields.
Sources: Daily News Hungary, The Wandering Investor
We made this infographic to show you how property prices in Hungary compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Central Budapest will see higher rental yields as demand for short-term rentals rises
In 2023, Hungary saw a tourism boom with 16 million tourists visiting, including 7.1 million international guests.
Budapest's private accommodations grew by 30% in 2023, with Airbnb leading the charge. This shows a strong demand for short-term rentals, even as supply races to catch up.
Despite more Airbnb options, bookings remain high, especially during peak seasons. This means short-term rentals are still hot, even if occupancy rates dip a bit.
Rental yields in Budapest climbed from 5% to 5.5% by June 2023, thanks to a national rent increase of 14-15%. This makes short-term rentals potentially more lucrative than long-term leases.
Investors are eyeing Budapest as rental yields continue to rise, driven by the city's growing popularity among tourists.
With Budapest's vibrant culture and history, the city is a magnet for visitors, ensuring steady demand for short-term stays.
Sources: Hungary Today, Cushman & Wakefield, MNB Housing Market Report
16) Luxury property prices in central Budapest will keep rising due to limited supply
Luxury property prices in central Budapest are on the rise due to a limited supply of new development sites.
Budapest is experiencing a shortage of new housing developments, especially in areas where demand is high. This trend is expected to continue into 2025, making it a challenging market for potential buyers. The city's charm and historical allure are part of the reason why new developments are scarce.
Government restrictions on new construction in heritage areas are another factor. These rules are designed to preserve the historical character of the city, but they also mean fewer new luxury properties are available. For those looking to invest, this scarcity can drive up prices even further.
Adding to the challenge, rising construction costs are making it more expensive to build new properties. As a result, fewer projects are being initiated, which means the existing properties become more valuable. This is a key reason why prices are climbing.
For those considering buying in Budapest, it's important to understand that the market dynamics are heavily influenced by these factors. The combination of limited supply, government regulations, and high construction costs creates a unique environment for property investment.
Investors should be aware that these conditions are likely to persist, making central Budapest a potentially lucrative but competitive market. The city's unique blend of history and modernity continues to attract interest, but the limited availability of new properties keeps the market tight.
Sources: Daily News Hungary, BNB Calc, Airbtics
17) High-end rental yields will grow as expatriate demand increases
In recent years, Budapest has become a magnet for expatriates, leading to a noticeable increase in demand for high-end rental properties. This trend is largely driven by the rising number of foreign nationals living in the city. For instance, the Chinese and Ukrainian communities have grown significantly, with the number of Chinese expatriates doubling and Ukrainians increasing four-fold since the Russian invasion of Ukraine.
Moreover, the influx of international companies like Thermo Fisher Scientific and BlackRock has further fueled this demand. These companies have established substantial operations in Budapest, attracting a diverse expatriate workforce. As a result, the expatriate community in Budapest has become more varied, with significant numbers of Italians, Indians, Poles, and other nationalities calling the city home.
This growing expatriate community has led to a higher demand for international schools and services, which in turn indicates a preference for high-end rental properties. Real estate agents have reported a rising interest in luxury rentals, as expatriates seek properties that offer a high quality of life and modern amenities. Additionally, the ongoing construction and renovation of high-end rental properties in Budapest cater to this increasing demand, making the city an attractive destination for international professionals.
Sources: Hungarian Conservative, Site Selection, Daily News Hungary
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.