The Hungarian government has identified alleviating housing difficulties as a key focus in its new economic action plan, which also aims to increase purchasing power and support businesses.

A housing crisis has persisted in Hungary for nearly two years, prompting the government to implement various measures to facilitate homeownership, with plans announced to ease access by the autumn of 2024.

The analysis of the real estate market consistently highlights the changes in square meter prices, which have reportedly reached an average of 1 million forints in Budapest and its surrounding areas, even for panel apartments.

In the new property market, the situation appears even more daunting, with square meter prices varying greatly depending on the location, often exceeding several million forints.

According to the latest assessments, a notable increase in interest for newly built apartments was recorded at the beginning of 2025, with inquiries jumping by 73% year-on-year, while interest in used properties rose by only 3%.

The demand for new apartments is nearing a five-year high, particularly in Budapest, surpassing even the record levels driven by the green loan program in 2022.

Balogh László, chief economic expert at ingatlan.com, reported that over 7,000 new apartments are currently advertised across Hungary, reflecting a 10% year-on-year increase, and a 3% rise in Budapest compared to the previous year, and 15% over two years.

Despite the growing supply, the market remains demand-driven, indicating a need for a more substantial supply to foster genuine competition.

The recent expansion of the state housing construction capital program from 200 billion forints to 300 billion forints is expected to aid in this regard.

In terms of pricing, the average square meter price for new apartments in Budapest has surpassed 1.5 million forints.

In premium districts of Buda (I, II, XII), prices exceed 2.6 million forints, whereas the average in the densely populated XI and XIII districts is around 1.6 million forints.

Only the XVIII and XX districts retain average prices below 1 million forints.

In regional cities, a total of more than 1,000 new apartments await owners, listed at an average of 950,000 forints per square meter.

Six cities—Szeged, Debrecen, Zalaegerszeg, Pécs, Székesfehérvár, and Eger—have breached the 1 million forints per square meter threshold, with average prices ranging from 1.02 to 1.15 million forints.

Győr is slightly lower, at an average of 970,000 forints due to a more ample supply.

An upward trend in new apartment prices is influencing the used property market as well, with newer apartments in Budapest reaching 1.48 million forints per square meter—an increase of 16% over the past year and 24% over the past two years.

Although demand shows continued growth, incentives in the government bond market are expected to dwindle by the end of June, which may lead to a deceleration in price increases in the latter half of 2025.

Moreover, the so-called Hungarian Golden Visa program allows foreign citizens to obtain a 10-year residence permit in Hungary—and thus access to EU passports—by investing nearly 200 million forints in real estate.

This program could further expand interest from foreign investors in the new apartment market.

With the property market facing such high prices, the average net wage without discounts stands at 462,000 forints, while the more realistic median wage is 383,000 forints.

Thus, even with stimulus measures in place, betting on a price reduction is deemed futile; rather, it is expected that prices may only stabilize.

Industry experts emphasize the pressing need for the government to adopt a long-term approach to the housing market, as this could create a more predictable environment for both developers and buyers.

Currently, there is a significant urgency to expand the supply of newly built apartments amid both rising demand and a low renewal rate of existing properties.

Increasing the number of construction projects would help keep prices in check.

Although efforts are ongoing to stimulate supply, many potential buyers express a preference for lower-priced options over higher-cost, less accessible properties.

The market reflects a pronounced sensitivity to pricing, particularly among younger prospective buyers enticed by modern construction standards.

The construction sector continues to face challenges, including rising construction costs driven by increased labor expenses and high prices for building materials.

These factors create uncertainty, particularly as potential rebuilding efforts in Ukraine could spike demand for materials, further inflating costs.

Banks are also adjusting to these market conditions; the introduction of preferential interest rates for young families under specific circumstances may aid in homeownership.

The accessibility of loans remains a considerable barrier, particularly for young people without sufficient savings or who do not intend to take on additional financial risks through investment into older properties or renovations.

Current data indicates a notable difference in required borrowing for new properties compared to used ones, necessitating higher average incomes to qualify for new home loans.

A combination of state-supported lending options and housing incentives is being explored to address the ongoing housing crisis, reflecting the complex dynamics shaping the availability and pricing of residential properties in Hungary.