Hungary's Residential Property Market Analysis 2025

The Hungarian housing market continues to recover, with sales prices demonstrating accelerating growth against the background of sluggish supply-side activity and increased demand for mortgages boosted by government-subsidized programs.

This extended overview from Global Property Guide covers key aspects of the Hungarian housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Housing Market Snapshot
• Historic Perspective
• Demand Highlights
• Supply Highlights
• Mortgage Market
• Rental Market
• Socio-Economic Context

Housing Market Snapshot

Residential property price growth in Hungary continued to accelerate. In Q1 2025, the aggregated MNB House Price Index, published by the Hungarian National Bank (MNB), showed a 15.34% year-on-year increase (9.57% when adjusted for inflation). On a quarterly basis, prices rose by 7.04% (4.36% inflation-adjusted). 

The dynamics did not present equally across the country’s regions. The strongest nominal year-on-year increases were recorded in Budapest (22.30%), the cities of Southern Transdanubia (16.84%), and Northern Hungary (15.91%). In contrast, cities in the Pest region saw the slowest growth, at 7.82%.

Hungary's house price annual change:

Note: Housing price indices, total price change in existing dwellings.
Data Source: Hungarian Central Statistical Office.

According to the Hungarian Central Statistical Office (KSH), the highest average prices per square meter for second-hand dwelling sales were consistently recorded in Budapest, followed by the Pest region, Central Transdanubia, and Western Transdanubia.

Housing price dynamics in key submarkets:

Looking ahead, experts expect the recovery of the Hungarian housing market, which began in late 2024, to continue throughout 2025. Strengthening demand, coupled with persistent supply constraints, is likely to push residential prices higher. OTP Mortgage Bank forecasts a nationwide average price increase of 15%, and up to 20% in key investment areas, an outlook broadly shared by RE/MAX Hungary.

Dávid Valkó, Senior Analyst at OTP Mortgage Bank, notes that several government measures are currently supporting market momentum. Ahead of the 2026 elections, a wide range of buyers, including end-users, investors, and those renovating existing homes, could benefit from more accessible financing and broader offerings. However, he warns that many of these measures are temporary, interest rate cuts are nearing their limits, and geopolitical and economic uncertainties remain. As a result, a prolonged steep price growth similar to previous cycles is unlikely over the medium term.

Historic Perspective:

Housing Cycles Driven by Global Events and Domestic Reforms

After the change of political regime in 1989, Hungary faced a transformative period in the 1990s and early 2000s, including numerous fluctuations in the real estate sector and nationwide challenges such as large-scale housing privatization, establishment of the mortgage system, and government-backed credit programs. After over a decade of reforms, Hungary became an EU member in 2004, without full monetary integration and adopting the euro as its primary currency. It kept the country exposed to the volatility of the national currency and high inflation, and eventually exacerbated the effect of the global financial crisis.

The aftermath of the 2008 global crisis was particularly devastating for the mortgage market and the construction industry in Hungary, as many transactions and development projects at the time were financed by loans based on foreign currency or state support, both brought down by the weakening forint. The decline in real house prices continued for 24 consecutive quarters, resulting in about a 21% drop in nominal prices and about a 35% drop in inflation-adjusted prices between 2008 and 2013. In parallel, dwelling deliveries kept falling as well, reaching a historic low of just 7,293 new units in 2013.

The recovery began in 2014 when the new legislation introduced by the Hungarian government required financial institutions to convert outstanding foreign currency-based loans into forint. As a result, the share of foreign exchange loans in the total value of housing loan stock dropped from nearly 53% in 2013 to 0.2% in 2015 and is a marginal 0.02% as of 2024.

Another large-scale initiative launched in 2015 to help reverse the consequences of the crisis and revive the housing market was the Family Housing Allowance Program (CSOK), which offered families with children non-refundable state subsidies for buying or extending homes. The rural CSOK (aimed at halting depopulation in rural areas) offered subsidies to those who wanted to buy or renovate a dwelling on a homestead or in a small settlement.

The resurgence in demand supported by the government subsidies and improved affordability of loans led to a period of considerable expansion that earned Hungary the reputation of one of the EU's "hottest property markets". Construction activity rebounded, with the annual volume of new deliveries growing by an average of 30% between 2016 and 2020 to a post-crisis high of over 28,200 new units added in 2020. Prices surged by more than 240% (over 160% inflation-adjusted) between 2014 and early 2022, with double-digit increases every year, the only exception being 2020 when the onset of the COVID-19 pandemic slowed down the growth to 8.93% (5.94% inflation-adjusted).

The global shortages and rise of construction material prices, as well as the shortage of skilled manpower in the market, led to a considerable decline in construction activity since the pandemic, further exacerbated by the inflation hike and overall economic recession in 2022-2023. In terms of prices, the market decelerated to the annual growth in nominal house prices of 12.3% and 10.0% in 2022 and 2023, respectively, which, due to high inflation, translated into an actual decrease of 8.5% in 2022 and a marginal rise of 2.1% in 2023.

The recent reversal of Hungary's housing market began in 2024 and has been largely driven by broader economic recovery and a series of government measures including tightened regulations on short-term rentals, the extension of preferential VAT rates, the launch of a rural home renovation program, and new provisions allowing individuals to use voluntary pension fund savings or a portion of their SZÉP Card balance for housing-related expenses. On the supply side, the Housing Capital Program, launched at the end of 2024, was introduced to encourage new residential development, further supporting market growth.

20-year annual house price change (based on end-of-year MNB aggregated house price index):

20-year construction activity dynamic (authorized and completed housing units):

Data Source: KSH.

Demand Highlights:

Demand Picks Up and Full-Year Expectations Strengthen

The Hungarian housing market is showing clear signs of recovery following a marked downturn in 2023. According to preliminary data from the KSH, a total of 126,844 residential property transactions were recorded nationwide in 2024, representing a substantial year-on-year increase of 20.58%. This growth was primarily driven by the second-hand segment, where sales rose by 22.26%, while new home sales declined by 4.72% as new supply constraints persisted.

Note: *Preliminary data.
Data Source: KSH.

The Great Plain and North macro-region accounted for the largest share of residential transactions, contributing 37% to the national total. In turn, Budapest represented 26% of all transactions and recorded the strongest year-on-year growth among all regions, with a 33.45% year-on-year increase in sales volume.

Housing transactions by private persons, by region:

Market momentum continued into the first half of 2025, supported in part by disbursements and redemptions from PMÁP government bonds. According to preliminary estimates from Duna House, a leading real estate services provider, 63,390 transactions were completed during this period, reflecting a 2.8% increase compared to the same period in the previous year. Analysts at MBH Bank note that while PMÁP-related inflows played a significant role in boosting early-year activity, their influence is expected to diminish over time, with demand increasingly driven by end-users purchasing homes for their own use.

OTP Mortgage Bank forecasts approximately 155,000 residential transactions for the full year 2025, placing the market slightly above the 10-year average. MBH Bank offers a somewhat more moderate estimate, anticipating 10,000 to 20,000 more transactions than in 2024. At the same time, analysts note that longer-term projections remain uncertain due to potential shifts in the political cycle in 2026 and external risks, including geopolitical tensions and changes in the interest rate environment.

Supply Highlights:

Construction Lags While Policy Support Sparks Permit Rebound

The Hungarian housing market continues to face sluggish supply-side dynamics, despite signs of improving demand conditions. In the first half of 2025, residential construction activity remained subdued, with the KSH reporting 5,129 dwellings completed, marking a 14.90% year-on-year decline.

The geographic distribution of newly completed units remained concentrated in the capital region, with Budapest accounting for approximately 36% of national completions. This was followed by Transdanubia (26%), Pest County (25%), and the Great Plain and North region (14%). Within Budapest, nearly half of all new homes were delivered in three districts: District VIII, District IX, and District XI.

Data Source: KSH.

In contrast, forward-looking indicators suggest a potential rebound in the future trajectory of residential development. The number of dwellings authorized for construction rose sharply, with the KSH data showing a 43.0% year-on-year increase in the first half of 2025, totaling 12,830 authorized units. Budapest led this recovery, with 5,992 permits issued, 3.8 times more than in the same period of the previous year. Notably, four districts accounted for 80% of all permits issued in the capital, with District XI alone receiving approvals for approximately 3,400 dwellings. Districts XIII, X, and XXI collectively added over 1,300 units to the pipeline.

Data Source: KSH.

Key dwellings supply indicators, by region:

Analysts attribute this upswing in permitting activity to renewed investor confidence, driven in part by recently launched housing support measures. Among these, the HUF 200 billion Housing Capital Program, introduced by the Hungarian Development Bank (MFB) in December 2024, is expected to play a pivotal role. According to Bence Gerlaki, Deputy State Secretary for Economic Development Strategy, the program could mobilize an estimated HUF 800-1,000 billion in housing investments over the coming years, significantly increasing the availability of high-quality residential stock nationwide.

While a meaningful increase in completed dwellings is unlikely in 2025, the current backlog of permitted but unbuilt projects is expected to gradually transition into the construction phase. This shift could alleviate supply constraints over the 2026-2027 period as more developments move from planning to completion.

Mortgage Market:

Upturn in Demand for Loans, New Subsidized Program Announced

While the overall improvement of the macroeconomic landscape in the EU allowed the European Central Bank (ECB) to continue reducing its policy rates in the first half 2025, most recently announcing another 25 b.p. cut in June, the MNB has been more hesitant to ease its monetary policy and has maintained the base rate at 6.50% since September 2024 in light of persistent inflationary pressure.

Hungary's mortgage loan interest rates:

Data Source: MNB.

"For the rest of the year, inflation is expected to stay above the tolerance band. The rate of price increases may decline persistently to the tolerance band in early 2026 and reach the 3 percent inflation target in early 2027. Given buoyant consumption, volatile commodity prices and strong wage dynamics, price stability can be achieved in a sustainable manner by ensuring tight monetary conditions," said the July MNB release on the decision to keep the rate unchanged.

Data Sources: ECB, MNB.

Against the background of persistent inflation and tight monetary conditions, interest rates on housing loans in Hungary have been stagnant and even demonstrated an uptick for some categories of credit, compared to levels observed a year ago, as lenders passed on their long-term financing costs to customers. The results of a Q1 2025 lending survey conducted by the MNB indicate that responding banks do not plan to change their housing loan conditions within the next six months, but a net 45% of them may tighten price-related conditions in line with the cost of bank funding.

In June 2025, the ECB reporting showed the average interest rate on new housing loans at 6.94%, 0.08 p.p. up from June 2024, while for outstanding loans the indicator reached 6.12%, demonstrating a 0.33 p.p. increase from the same period last year.

Average interest rates on loans to households for house purchase:

The hike in interest rates in 2022-2023, coupled with a decline in households' real income and confidence amid the economic recession, previously led to a notable drop in the volume and value of new mortgages issued. However, improved lending conditions (including an interest rate ceiling on new mortgages imposed by the authorities), rising real wages, and deferred demand from the previous period led to a sharp rebound in new lending in 2024. Throughout the year, the KSH reported a total of 75,526 approved loans for HUF 1.35 trillion (USD 3.7 billion), a 46.4% increase in volume and 121.5% increase in value compared to 2023. The proportion of government-subsidized loans in new approvals increased from 20.7% in 2023 to 25.2% in 2024.

Home lending continued to be dominated by loans for the purchase of second-hand dwellings, which accounted for about 68% of the number of loans and nearly 78% of the total amount disbursed in 2024. Simultaneously, the purchase of new dwellings represented only about 8% of the number and 10% of the total amount of credit extended.

Data Source: KSH.

Despite stagnating market interest rates, the expansion of housing lending continued into 2025, with most banks noting a pickup in demand for housing loans, according to the MNB lending survey. In parallel, the central bank highlights subsidized mortgage options and inflation-based increases in loan sizes as factors fueling the ongoing surge. "The significant upturn in housing lending was supported by rising contract sizes in line with the higher house prices, which was also helped by the low client interest rates available under the HPS Plus program," said the latest MNB housing market report.

Looking ahead, subsidized programs can be expected to continue sustaining the mortgage market in the country in a high-interest-rate and high-property-price environment. In July 2025, the Hungarian Government announced the Otthon Start (Home Start) program - a new subsidized mortgage initiative, which will be available from September. Under this new scheme, home loans up to HUF 50 million (about USD 135,000) at a fixed 3% interest rate for a maximum term of 25 years will be available to first-time buyers. The property price eligibility threshold for the scheme is set at HUF 100 million for apartments and HUF 150 million for standalone houses.

The total value of outstanding housing loans in Hungary increased by 13.0% year-on-year and reached HUF 5.7 trillion (USD 15.5 billion) in 2024, with subsidized loans making up about 19% of the stock. The relative size of the market represented by the loans to GDP ratio has declined substantially in recent years, dropping from an estimated 15.6% of GDP at current prices in 2010 to 6.9% in 2024.

Data Source: KSH.

Rental Market:

Slower Rental Growth and STR Containment Measures in Budapest

In the first half of 2025, rental inflation in Hungary continued to moderate and has approached levels previously observed in 2017-2018. According to experimental statistics reported by the KSH together with the property website Ingatlan.com, the year-on-year growth of the nominal rent index in June 2025 was recorded at 7.3% nationwide and 6.7% in Budapest, down from the respective 9.4% and 9.6% in January. In real terms, the rental growth reached 2.6% nationwide and 2.0% in Budapest, also down from the respective 2.8% and 2.2% at the beginning of the year.

Hungary's rent price index:

Data Source: ECB.

On the regional level, the most pronounced annual increase in the nominal rent index was observed in Northern Hungary (11.3%), followed by Pest (9.5%) and Southern Great Plain (8.4%), while the slowest growth was reported in Northern Great Plain (4.6%).

Data Sources: KSH, Inglatan.com.

Average asking rents in H1 2025, as reported by the KSH and Ingatlan.com, ranged from HUF 274,000 (USD 740) in Pest and HUF 264,000 (USD 713) in the capital city of Budapest to HUF 137,000 (USD 371) in Northern Hungary.

According to research by Global Property Guide, as of July 2025, gross rental yields for apartments in Hungary average 5.09%, slightly down from 5.11% previously reported in January and 5.78% in March 2024. Among the monitored regional submarkets, the highest average yield was observed in Debrecen (5.47%) and Budapest (5.03%), while Nyíregyháza and Pécs showed slightly lower potential performance at 4.94% and 4.93%, respectively.

The latest housing market report from the MNB also indicated a compression of rental yields in Budapest and rural towns alike within the last twelve months.

Average monthly rent (based on home rental ads posted on ingatlan.com):

Overall, the rental market in Hungary remains limited, as the country's homeownership ratio is one of the highest in the EU at over 91%, according to Eurostat data. At the same time, only 4.2% of the population are tenants renting at market rates. Based on national census data, the share of renting households in Budapest is notably above the national average (around 9%) and reached 17.5% during the 2022 Census. Both in the capital and nationwide, this indicator is up, however, from the respective 7.4% and 12.7% reported a decade ago during the 2011 Census.

In the capital city of Budapest, a restructuring of the rental market is anticipated as the government takes steps to address the low availability of affordable housing, which became an issue in recent years, in part due to the growing segment of short-term rentals. The MNB, citing AirDNA data, previously reported a 66% increase in the number of short-term rental properties in the capital between 2020 and 2024.

In response, the government introduced a two-year moratorium on issuing new Airbnb licenses in Budapest from 2025 and increased the annual flat-rate tax on private accommodation under the New Economic Policy Action Plan. In addition, as a result of the referendum held in September 2024, the capital's District VI will entirely stop short-term rentals of apartments from January 2026. These steps are expected to redirect units from short-term to longer-term rentals, potentially easing supply constraints and dampening rent spikes locally. "The effect of the ban on short-term rentals in District VI may shift some of the rentals rented out this way to the long-term rental market, thereby increasing the supply of sublets and reducing the local dynamics of sublet prices," the MNB commented.

Socio-Economic Context:

Economic Recovery is Facing Headwinds

Following a 0.8% contraction in 2023, the Hungarian economy shifted to a gradual recovery, with real GDP growing by 0.5% in 2024 on the back of consumption bolstered by substantial wage increases and a decline in households' savings. At the same time, investment declined due to an uncertain business environment and cuts in public investment, and exports remained sluggish due to the weak performance of machinery and vehicle exports. Partly owing to a decline in industrial production, economic activity declined in Q1 2025 by an estimated 0.2% quarter-on-quarter, and the European Commission projects annual growth to remain subdued this year, reaching only 0.8% before picking up to 2.5% in 2026.

In parallel, although Consumer Price Index (CPI) inflation in the country has decreased from very high levels (from 17.1% in 2023 to 3.7% in 2024), underlying inflationary pressures remain strong. Most recent reporting from the KSH showed inflation accelerating to 4.6% in June 2025, with domestic demand and rising food prices expected to keep the indicator elevated well above the central bank's target throughout the rest of the year. The European Commission forecasts inflation to reach an annual level of 4.1% in 2025, before decreasing to 3.3% in 2026.

Data Source: IMF.

While remaining tight by historical standards, the Hungarian labor market started to ease in recent years, with the unemployment rate for the population aged 15-74 increasing from 3.5% in mid-2022 to 4.3% in June 2025, according to the KSH reporting. The average net monthly earnings in the country reached HUF 483,000 (USD 1,350) in May 2025, a 7.7% year-on-year increase.

According to the European Commission's forecast, a gradual economic recovery can be expected to lower the unemployment rate from the annual level of 4.5% in 2024 to 4.4% in 2025 and 4.3% in 2026. Nominal wage growth is set to remain elevated in 2025 and 2026, driven by a further 9% minimum wage increase in 2025, the tight labor market, and wage hikes in the public sector.

Data Source: KSH.

Overall, the Hungarian economy is at a "challenging juncture", according to the International Monetary Fund (IMF) assessment. "Output has stagnated over the past 3 years, while inflation remains well above the central bank's 3 percent target. Regulatory measures - such as price, interest and margin caps, along with windfall taxes and subsidized lending schemes - have distorted market signals and added uncertainty," pointed out the IMF staff statement on the conclusion of the 2025 Article IV mission to the country.

In June 2025, Fitch Ratings affirmed Hungary's 'BBB' standing with a stable outlook, noting that while the country is a competitive destination for foreign direct investment, notably in automotive and battery sectors, its strengths are balanced against high public debt, a record of unorthodox economic policies, worsening of governance indicators in recent years, and the economy's high openness, which leaves it exposed to external shocks. Economically, Hungary remains highly integrated with its EU and non-EU partners, such as Germany, Austria, Italy, Poland, and others, making it prone to spillovers resulting from developments in their respective economies.

Sources:

1. Hungarian Central Statistical Office (KSH)
   1. Census Database: https://nepszamlalas2022.ksh.hu/
   2. Housing: https://www.ksh.hu/
   3. HCSO-ingatlan.com Rent Index, June 2025: https://www.ksh.hu/
   4. Employment and Unemployment First Releases, June 2025: https://www.ksh.hu/
   5. Consumer Prices First Releases, June 2025: https://www.ksh.hu/
   6. The Number of Dwellings Put Into Use Was Lower Than a Year Earlier, But Those Permitted Were Significantly Higher: https://www.ksh.hu/
2. Hungarian National Bank (MNB)
   1. MNB Statistics: https://statisztika.mnb.hu/
   2. MNB House Price Index: https://statisztika.mnb.hu/
   3. Housing Market Report May 2025: https://www.mnb.hu/
   4. Housing Market Report May 2024: https://www.mnb.hu/
   5. Exchange Rates: https://www.mnb.hu/
   6. Base Rate History: https://www.mnb.hu/
   7. Press Release on the Monetary Council Meeting of 22 July 2025: https://www.mnb.hu/
3. Government of Hungary
   1. Fixed 3 Percent Home Loan for First-Time Home Buyers (HU): https://kormany.hu/
   2. Tightening Airbnb Regulations Serves to Solve Budapest's Housing Problem: https://kormany.hu/
4. European Commission
   1. In-Depth Review 2025: Hungary: https://economy-finance.ec.europa.eu/
   2. Economic Forecast for Hungary: https://economy-finance.ec.europa.eu/
   3. Distribution of Population by Tenure Status, Type of Household and Income Group: https://ec.europa.eu/
5. European Central Bank (ECB)
   1. ECB Data Portal: https://data.ecb.europa.eu/
   2. Key ECB Interest Rates: https://www.ecb.europa.eu/
6. International Monetary Fund (IMF)
   1. Country Overview: Hungary: https://www.imf.org/
   2. Staff Concluding Statement of the 2025 Article IV Mission: https://www.imf.org/
   3. 2024 Article IV Staff Report: https://www.imf.org/
7. OTP Mortgage Bank
   1. OTP Residential Real Estate Value Map. 2025/1 (HU): https://www.otpbank.hu/
8. MBH Bank
   1. Housing Market Outlook. 2025 Q1 (HU): https://www.mbhbank.hu/
9. RE/MAX Hungary
   1. Housing Market Report - 2025 Q1: https://www.remax.hu/
10. Duna House
    1. Duna House Barometer - Issue 168, Q2 2025 and June 2025: https://newdhapi02.dh.hu/
11. Fitch Ratings
    1. Fitch Affirms Hungary at 'BBB'; Outlook Stable: https://www.fitchratings.com/
12. Reuters
    1. Budapest District Narrowly Votes to Ban Short-Term Rentals From 2026: https://www.reuters.com/
    2. Hungary Mulls Freeze on Airbnb Licences in Budapest: https://www.reuters.com/
13. The Budapest Times
    1. Hungary Launches Low-Interest Housing Loan Program for First-Time Buyers: https://www.budapesttimes.hu/
    2. Final Details Confirmed for 3% Housing Loan Program…: https://www.budapesttimes.hu/
    3. Stricter Rules for Airbnb in Budapest: https://www.budapesttimes.hu/
14. Index
    1. The Government Has Decided to Impose a Two-Year Moratorium on Airbnb-Style Apartment Rentals in the Capital (HU): https://index.hu/
    2. The Government Announced A 200 Billion Forint Investment, And The Housing Development Program Is Launched (HU): https://index.hu/
    3. The Government Made A Last-Minute Decision To Pump A Huge Amount Of Money Into The Housing Market (HU): https://index.hu/
15. Biztos Dóntés 
    1. Home Start Loan: Hungary's 3% Government-Backed Mortgage Program: https://biztosdontes.hu/
16. Pénzcentrum
    1. The Hungarian Real Estate Market is in Tailspin (HU): https://www.penzcentrum.hu/
17. ScienceDirect
    1. Dwellings and Housing Market in Hungary, 1990-2015: https://www.sciencedirect.com/