Is there a risk of a price explosion in Budapest in 2025?
Property prices in Hungary are currently rising more than twice as fast as inflation. According to the real estate price index from ingatlan.com, real estate rose in price by an average of 6.7 percent in September compared to the previous year. In Budapest the price increase was even 9.1 percent. This trend could increase significantly in 2025.
Prices rose particularly sharply in Budapest
The price increase is particularly strong in Budapest. The average price per square meter in the capital is already 1.07 million forints (HUF). The most expensive is the city center of Pest with an average price per square meter of HUF 1.73 million. In comparison, the cheapest district of Budapest, Pesterzsébet, averages HUF 714,000 per square meter.
Pension funds could heat up the market
The reason for the expected price explosion: The Hungarian government plans to allow pension funds to invest up to 30% of their assets in real estate from 2025. The aim of this measure is to increase pension fund returns and stimulate the Hungarian real estate market. As a result, funds amounting to several trillion forints (approx. 10 billion euros) could flow from pension fund savings and government securities into the real estate market. This windfall, that corresponds to a third to a quarter of the usual annual housing market turnover, could drive prices up further, especially in Budapest and the big cities. László Balogh, the leading economist at ingatlan.com, expects prices to rise by at least 10-15 percent.
However, experts fear that this could lead to an overheating of the market and a sharp increase in property prices. Critics also point out that this measure could jeopardize Hungarians' retirement savings, as investments in real estate involve a higher risk than investments in government bonds.
Source: hvg.hu
