Hungary's Housing Market Faces Significant Price Increases in 2024
Rising construction costs and changing economic policies contribute to a challenging environment for homebuyers.
The Hungarian housing market is poised for considerable price increases in 2024, as the impact of government economic policies and a downturn in new construction loom large.
According to the MBH Analysis Center's quarterly housing market outlook for late 2024, Hungary is expected to see a sharp decline in new home construction, with only 13,295 new units built—29% fewer than in the previous year.
This reduction in construction is accompanied by a decrease in building permits, leading to expectations of modest growth in the following year, with projections of no more than a 10% increase.
The number of real estate transactions in Hungary reached 124,504 in 2024, with projections indicating an increase of 10,000 to 20,000 transactions in the upcoming year.
This anticipated growth is attributed to supportive housing initiatives and the release of capital from maturing government bonds, particularly the premium government bonds (PMÁP).
In 2025, payouts from PMÁP are set to reach unprecedented levels, totaling approximately HUF 1,750 billion, with HUF 1,270 billion projected for just the first three months of the year.
The landscape of residential government bonds is also diversifying, with expectations that total capital and interest payments in 2025 could approach HUF 3,000 billion.
A significant portion of this capital is likely to be redirected into real estate investments due to declining interest rates.
Demand for housing is already showing upward pressure on prices.
Data from Duna House indicates that 36% of real estate transactions in Budapest in January were motivated by investment purposes.
Year-on-year, nominal housing price growth has surged to 14.5%, with real price increases recorded at 10.6%.
The disparity in prices between Budapest and other regional cities has widened, especially concerning the resale market for used homes.
The pricing trends for new versus used properties are diverging, with new homes maintaining a robust appreciation trajectory while used homes are witnessing more modest price growth.
The average price per square meter for new properties in Budapest stands at approximately HUF 1.4 million.
Currently, only two districts in Budapest feature average prices below HUF 1 million per square meter.
According to data from ingatlan.com, the price range for used residential properties in January varied widely, from HUF 739,000 to HUF 1.9 million per square meter, depending on the district, with the XX district being the most affordable and the V district the most expensive.
For new properties in Budapest, significant price variations exist: the XII district holds the highest average price at HUF 2.9 million per square meter, while both the XVIII and XX districts have averages that remain below HUF 1 million.
Forecasts for 2025 suggest housing prices could rise nationally by 14-17%.
Rental prices have also risen, climbing by 9.4% nationally and 9.5% in Budapest as of January 2025. Contributing factors include rising real wages, pension fund savings, and bond payouts, all of which could intensify demand in the rental market.
In January 2025, rental prices increased by 1.7% nationally and 1.8% in Budapest compared to the previous month.
These figures indicate an annual increase of 9.4% nationwide and 9.5% in Budapest compared to the same month the previous year, and 116% and 106%, respectively, when compared to 2015 levels.
Mortgage lending has set new records, with a 227% increase in housing-related loan contracts in 2024. In January 2025, the volume of mortgage applications rose by 53% compared to the same month in the previous year.
The volume of new loans is expected to grow by 25% in 2025.
According to the MBH Analysis Center's quarterly housing market outlook for late 2024, Hungary is expected to see a sharp decline in new home construction, with only 13,295 new units built—29% fewer than in the previous year.
This reduction in construction is accompanied by a decrease in building permits, leading to expectations of modest growth in the following year, with projections of no more than a 10% increase.
The number of real estate transactions in Hungary reached 124,504 in 2024, with projections indicating an increase of 10,000 to 20,000 transactions in the upcoming year.
This anticipated growth is attributed to supportive housing initiatives and the release of capital from maturing government bonds, particularly the premium government bonds (PMÁP).
In 2025, payouts from PMÁP are set to reach unprecedented levels, totaling approximately HUF 1,750 billion, with HUF 1,270 billion projected for just the first three months of the year.
The landscape of residential government bonds is also diversifying, with expectations that total capital and interest payments in 2025 could approach HUF 3,000 billion.
A significant portion of this capital is likely to be redirected into real estate investments due to declining interest rates.
Demand for housing is already showing upward pressure on prices.
Data from Duna House indicates that 36% of real estate transactions in Budapest in January were motivated by investment purposes.
Year-on-year, nominal housing price growth has surged to 14.5%, with real price increases recorded at 10.6%.
The disparity in prices between Budapest and other regional cities has widened, especially concerning the resale market for used homes.
The pricing trends for new versus used properties are diverging, with new homes maintaining a robust appreciation trajectory while used homes are witnessing more modest price growth.
The average price per square meter for new properties in Budapest stands at approximately HUF 1.4 million.
Currently, only two districts in Budapest feature average prices below HUF 1 million per square meter.
According to data from ingatlan.com, the price range for used residential properties in January varied widely, from HUF 739,000 to HUF 1.9 million per square meter, depending on the district, with the XX district being the most affordable and the V district the most expensive.
For new properties in Budapest, significant price variations exist: the XII district holds the highest average price at HUF 2.9 million per square meter, while both the XVIII and XX districts have averages that remain below HUF 1 million.
Forecasts for 2025 suggest housing prices could rise nationally by 14-17%.
Rental prices have also risen, climbing by 9.4% nationally and 9.5% in Budapest as of January 2025. Contributing factors include rising real wages, pension fund savings, and bond payouts, all of which could intensify demand in the rental market.
In January 2025, rental prices increased by 1.7% nationally and 1.8% in Budapest compared to the previous month.
These figures indicate an annual increase of 9.4% nationwide and 9.5% in Budapest compared to the same month the previous year, and 116% and 106%, respectively, when compared to 2015 levels.
Mortgage lending has set new records, with a 227% increase in housing-related loan contracts in 2024. In January 2025, the volume of mortgage applications rose by 53% compared to the same month in the previous year.
The volume of new loans is expected to grow by 25% in 2025.
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