The Magyar Effect: Budapest residential real estate facing the next big upswing

The Hungarian real estate market – and especially the residential market in Budapest – is facing a historic change. This is exactly what the country's leading experts predicted in a highly regarded article on Portfolio.hu at the beginning of May 2026. The title speaks volumes: "Experts have spoken: The Hungarian real estate market is on the threshold of an astonishing change; the long-awaited foreign capital may begin to flow in."

1. The turning point in the Budapest residential real estate market

After four years of extensive stagnation, characterized by high inflation, restrictive policies and a clear predominance of domestic investors (approx. 80% of transactions), an “elképesztő változás” – an astonishing change – is now emerging.

The driving force behind this is the new government under Péter Magyar and the Tisza party, which has led the country since the parliamentary elections in April 2026. The experts - including Borbély Gábor (CBRE CEE Research Director), Ódor Dániel (Taylor Wessing Hungary), Schőmer Norbert (RICS Hungary) and Manuel Simon (VIG Fund) - see the announced reforms (more transparency, EU rapprochement, release of EU funds, euro target and reduction of bureaucratic hurdles) as the long-awaited catalyst for the inflow of foreign capital. What previously primarily affected the commercial sector is having a direct and massive impact on the residential real estate market: new construction and existing buildings in Budapest benefit equally from increasing liquidity, greater predictability and a significantly improved investor mood.

2. Political-economic context – Péter Magyar's government and its impact

The election of April 12, 2026 marked a political landslide: the Tisza party under Péter Magyar won an absolute majority, ending 16 years of the Orbán era. The new government has set clear pro-European priorities from the start - and it is precisely this orientation that real estate experts see as a decisive game-changer for the Budapest housing market.

The focus is on three major levers:

• Release of frozen EU funds (approx. 17-18 billion euros from the Recovery and Resilience Facility and the Cohesion Fund). The funds were blocked under the previous government because of rule-of-law concerns. Magyar already held talks with the EU Commission in the first weeks after the election and announced concrete steps: joining the European Public Prosecutor's Office (EPPO), setting up a National Asset Recovery and Protection Office, strengthening judicial independence and anti-corruption measures. Experts like Ódor Dániel (Taylor Wessing) emphasize that these quick reforms could “quickly restore investor confidence”.
• Euro target until around 2030 and clear EU rapprochement. The government has formulated the introduction of the euro as an explicit goal. This creates long-term currency stability and reduces FX risk – a point that is particularly relevant for private EU investors. Borbély Gábor (CBRE) sees this as the reason why “the Western capital inflow, which has almost completely stopped in recent years, can now start again”.
• Reforms for more transparency and legal certainty. Schőmer Norbert (RICS Hungary) puts it precisely: A well-functioning market needs “equal treatment, accountability, transparency, sustainability and respect for the rule of law”. The new government, with its two-thirds majority, can quickly implement these principles - from relaxing state preemption rights in World Heritage areas (e.g. Budapest city center) to reforming the “kiemelt beruházási rezsim” (faster approvals) and abolishing unnecessary bureaucratic hurdles.

Conclusion: The pro-European orientation of the Tisza government (EU fund release, euro target, anti-corruption and transparency reforms) reduces the very risks that have deterred foreign investors in recent years. This creates the predictability and fair competition required by experts (Schőmer, Ódor, VIG Fund). For the Budapest residential market this means: higher liquidity, increasing transaction volumes and a return of foreign capital - initially regionally (Czech Republic, Poland), then also from Western Europe. 

3. Foreign capital and the role of private EU investors

Until now, the Budapest real estate market has been heavily dominated by domestic investors. According to expert reports, Hungarian buyers accounted for up to 80% of all transactions in recent years - foreign capital played a minor role. That is exactly what is changing noticeably now. The new government under Péter Magyar has restored the confidence of international investors with its clearly pro-European orientation. The leading market observers see this as the starting signal for the long-awaited inflow of capital. Manuel Simon from VIG Fund sums it up: “Budapest was always on the map of international investors – entry was just a question of the right timing and reduced risks.” Borbély Gábor from CBRE expressed a similar opinion: With more transparency and legal certainty, the market will become attractive again for foreign investors.

Diagram 3: Share of foreign investors in the Budapest real estate market since 2020
Source: CBRE, MNB Commercial Real Estate Report (2020-2025), own forecast 2026

The first wave of foreign investors is expected to come from the region - especially from the Czech Republic and Poland, where funds and family offices have been active in Budapest for years. This is followed by Western and Northern European investors from Germany, Austria, the Netherlands and Scandinavia. The Budapest housing market is particularly interesting for this group: stable rental demand due to tourism, international students and the capital's growing economy.

Conclusion:  The forint rally since April 2026 has made entry for EU investors more expensive in the short term, but at the same time it massively reduces the currency risk and signals the start of the long-awaited capital inflow. Budapest will once again become an attractive destination for private investors from Germany, Austria, the Netherlands and Scandinavia who want to buy, rent or use apartments themselves. The first regional funds (CZ/PL) pave the way for Western European capital - a development that will be directly felt by the residential market (new buildings and existing buildings).

4. Currency development of the forint – opportunity or hurdle for EU investors?

The dramatic appreciation of the forint since the election on April 12, 2026 is the most important short-term factor for European private investors. In just four weeks, the EUR/HUF rate has fallen from 378-390 to currently 354-357 HUF/EUR - an appreciation of the forint by 8-10%. For buyers from the euro area, this means a corresponding increase in the price of all Budapest apartments if HUF prices remain unchanged.

Current situation (as of May 12, 2026): Before the election 378-390 HUF/EUR, currently 354-357 HUF/EUR (four-year low). A typical existing apartment in a good location, which cost 3,400-3,700 EUR/m² before the election, is now 3,650-3,940 EUR/m².

Analysts' forecasts for 2026-2027 show further moderate strengthening in 2026 and possible slight devaluation in 2027. The majority of banks see the current strength as a sign of the markets' confidence in the new government.

Conclusion: The 8-10% appreciation of the forint since the election increases the cost prices in euros, but offers greater stability and massively lower currency risk. The forecasts point to further strengthening in 2026 and a possible slight correction in 2027 – an ideal combination for European private investors with buy-to-rent or owner-occupancy strategies in the Budapest residential market.

5. Economic development of Budapest as a foundation

Budapest is not only the capital of Hungary, but also the country's undisputed economic center. With a share of around 40% of Hungary's GDP and a strong concentration on services, IT, finance and higher value manufacturing, the city forms the backbone of the national economy. Through its pro-European policies (EU fund release, anti-corruption reforms and euro target), the new government under Péter Magyar is creating exactly the stability that Budapest needs to shine again as an attractive FDI location.

The macroeconomic forecasts for 2026 are mostly positive. After a phase of stagnation in 2024/2025, an upswing to 2.0–2.5% is expected for 2026. Budapest benefits above average from this. Important drivers for the residential real estate market are rising real wages (+4-6%), low unemployment (approx. 4.3-4.5%) and the return of foreign direct investment.

Conclusion: Budapest, as Hungary's economic and service center, is benefiting massively from the stabilization under the new Tisza government. Rising real wages, persistently low unemployment and the return of foreign direct investment are creating a solid foundation for continued high demand for residential properties – both in new construction and in existing properties.

6. Tourism development and short-term rental (Airbnb)

Hungarian tourism set a new record in 2025 – and Budapest was the clear winner. Over 20 million guests visited Hungary, including more than 8.1 million in Budapest alone (+13% compared to 2024). The number of overnight stays in the capital was around 18.5 million (+ approx. 9-10%). A total of almost 47 million guest nights were registered nationwide – an increase of 4.3% compared to the previous year.

This enormous growth potential underlines the expert statements in the Portfolio.hu article: Budapest is still significantly underdeveloped in the hotel industry and tourism (only around 24,000 hotel rooms compared to Prague or Vienna). At the same time, the rules of the game for short-term rental are changing fundamentally:

• From January 1, 2026, in District VI (Terézváros). complete ban private short-term rental (“0-day rule”).
• From 2025, a uniform flat rate tax of exactly 150,000 HUF per room per year for short-term rental.
• Additionally, there is a two-year moratorium (2025-2026) on registering new short-term rental throughout the city.

Source: Budapest-Invest – Airbnb taxation in Hungary / Budapest

For investors this means: The high tourist demand remains, but the regulatory shift (ban in District VI and the sharply increased tax) means that significantly more supply for long-term rentals is available. Before regulation, the Airbnb boom had made long-term rentals significantly more expensive - too much short-term rental and at the same time too little offer for normal tenants. Now the additional offer relieves rent prices from the perspective of tenants - which can initially reduce gross returns for landlords.

Are an attractive way out furnished, fixed-term rental contracts from 90 days, which are not subject to any special short-term regulation and promise significantly higher returns. Units in a central location (not in the 6th district) that are suitable for both tourists and long-term tenants are particularly worthwhile: upscale, attractively designed apartments in the 30-50 m² size range. The higher return comes from the furnishings, the time limit and the fact that these units are mainly used by foreign tenants who work in Budapest for 1-3 years and do not want to bring their entire household possessions with them.

Under certain conditions (insufficient hotel capacity), record tourism could even lead to a revival of short-term rental from 2027 (after the end of the 2-year license moratorium) and thereby become another strong driver of performance and purchase prices.

Conclusion:Dhe record tourism in 2025 (Budapest +13% guests, almost 18.5 million overnight stays) confirms the enormous potential that the experts highlight in the Portfolio.hu article. However, the new restrictions (total ban in District VI and 150,000 HUF tax per room) force a clear shift towards stable medium and long-term rentals. For private EU investors, this creates an opportunity for predictable, above-average rental income - especially through furnished, fixed-term contracts of 90 days or more in central 30-50 m² units, which at the same time benefit from tourism and expats. Tourism primarily drives the increase in the value of the properties, rather than the current rental prices.

Sources

• Hungarian Tourism Agency / KSH (January 2026).
• Budapest Invest (2024/2025): Airbnb taxation in Hungary / Budapest.
• Minut.com, Homever.hu, Xpatloop (district VI ban and tax 2025/2026 reports).

7. International students as a reliable demand driver

In addition to tourism and business, the international student market is one of the most stable and crisis-proof demand drivers for the Budapest residential market. Hungary currently has over 36,000-40,000 international students (numbers have more than doubled since 2010), most of whom are concentrated in Budapest.

Important universities and numbers:

• ELTE: ~8,000 international students (humanities and sciences)
• BME (TU Budapest): ~4,500 international students (engineering)
• Semmelweis: ~3,200 international students (Medicine, longest period of study)
• CEU: ~1,800 students (graduate level, highest budget)
• Corvinus: ~1,500 international students (economics)

Most students are looking for long-term, furnished and centrally located apartments - ideally close to the universities (districts VIII., IX., XI., XIII.). In contrast to tourism, this demand is year-round, not very seasonal and extremely resilient. Many students stay for several years and are willing to pay higher rents for modern, well-equipped micro-apartments or shared-share-like units.

With its approach to the EU and the euro target, the new government is signaling additional attractiveness for international students - a further positive effect for the housing market.

German students: The most important single group

German students represent the largest national group at around 22% (approx. 6,800 people):

• Familiar legal and quality standards expected
• Above-average willingness to pay: 400-600 EUR/month
• Longer stay: 3-4 years complete programs
• Network effect through recommendations

Conclusion: With over 36,000-40,000 international students (strongly concentrated in Budapest), a crisis-proof, year-round and long-term tenant market is emerging. This perfectly complements the tourism boom and forms a stable basis for continuous rentals - particularly attractive for private EU investors who are looking for predictable returns without the regulatory risks of the classic short-term segment.

Sources

• ELTE, BME, Semmelweis University (current figures 2025/2026).
• Study in Hungary / CDP Center (development since 2010).
• QS rankings and university reports 2026.

8. Offer situation: new building vs. existing/period property

The supply of residential properties in Budapest remains extremely tight. While demand continues to rise due to economic growth, tourism and international students, the volume of new construction is at a historically low level. Only around 2,821 new apartments were completed across the country in 2025 - a figure that is strikingly low even compared to other CEE countries. In Budapest itself, only a few thousand units are built each year, while the demand for modern, energy-efficient apartments is significantly higher.

Diagram 6: New apartments in Hungary / Budapest 2020–2026
Source: KSH, MNB Housing Market Report Q1 2026

New building: Advantages include higher energy efficiency and modern equipment. Disadvantages are significantly higher prices (often 2.0–3.7 million HUF/m²) and longer completion times. The reforms announced by the new government (including the reduction of bureaucratic hurdles) could provide relief here in the medium term.

Existing/period property: This is where the greatest liquidity and the greatest return potential for private investors lies. Well-renovated period apartments in central or student-friendly locations (districts II, V, VI, VII, VIII, IX, XI, XIII) can be rented all year round and generate stable rental income. The shortage of inventory ensures that high-quality properties remain in high demand.

Diagram 2: Purchase prices for Budapest city center apartments 2024–2026 (EUR/m²)
Source: MNB Housing Report, ingatlan.com, Global Property Guide (Q1/Q2 2026)

Conclusion: The extremely low volume of new construction combined with high demand is leading to a persistent shortage of inventory. The new government's reforms could stimulate new construction in the medium term, but for private EU investors, high-quality inventory in good locations remains the most attractive and liquid option - especially for projects that are already priced and rented in euros.

Sources

• KSH (building permits and completions Q1 2026).
• MNB Housing Market Report Q1 2026.
• Own project developments (completion August 2026).

Currently for sale – and in euros: Renovated apartments in a historic period property with immediate rentability

We are currently preparing several high-quality renovated and furnished existing properties for sale, which will be priced and rented entirely in euros. These properties will be ready for occupancy in August 2026 - including full renovation, premium furnishings and long-term rental agreements.

9. Price development, rents, returns and market indicators

The prices for apartments in Budapest rose sharply in nominal terms in 2025 - in some cases by 20-30% in the city center. The forint appreciation since April 2026 has further increased this increase from a euro perspective. Current average prices are:

• Stock (good locations): 3,650–3,940 EUR/m²
• Premium new building: 5,600–10,400 EUR/m²

Rents follow price developments with a delay. Long-term rentals have come under slight pressure due to Airbnb's shift (more supply), but remain stable to slightly increasing in central and student locations. Gross returns for long-term rentals are currently 4.5-5.5% - depending on the location, equipment and type of contract (furnished/limited contracts of 91 days or more often reach significantly higher values).

Conclusion: Despite the 8-10% higher purchase prices due to the strong forint, the Budapest residential market remains attractive for buy-to-rent strategies. The combination of excess demand and regulatory shift in short-term rental ensures stable to increasing rents - especially in professional concepts with long-term or temporary rentals.

10. Regulatory framework, opportunities and risks

The new government has already announced the first steps to improve legal certainty: relaxation of state preemption rights in world heritage areas, faster approvals and EU-compliant standards. Buying an apartment remains relatively uncomplicated for EU citizens (no approval requirement like for non-EU citizens).

Risks: Local district rules (e.g. Airbnb ban in District VI) and possible additional tax or rental price regulations.

Opportunities: The planned transparency offensive and the euro target reduce political and currency risk in the long term.

Conclusion: The Tisza government's planned reforms reduce bureaucratic hurdles and increase predictability - exactly what private EU investors need. Local restrictions (e.g. for short-term rental) can be easily avoided through smart concepts (limited long-term rentals).

11. Strategies for European private investors & projections 2026-2030

Medium-term scenario (2026-2030): Positive. Rising prices (+5-8% p.a. in euros with moderate forint development), higher liquidity and stable rental income due to economic and tourism growth.

Recommended strategy:

• Focus on high-quality inventory in student-friendly or central locations (30–50 m²)
• Furnished, temporary long-term rental from 90 days for maximum return
• Use euro-priced, ready-made objects to avoid FX risk
• Horizon 5-8 years for an attractive exit with a possible forint correction

Conclusion: Despite the more expensive entry due to the strong forint, Budapest remains an attractive “safe haven” in the CEE region. Private EU investors who rely on stable long-term rentals and professional concepts can benefit from increasing liquidity, low risks and solid returns.

Total sources (selection): Portfolio.hu (May 2, 2026), ECB, Bloomberg, MNB Housing & Commercial Real Estate Reports, Duna House Ingatlanpiaci Barométer, KSH, Hungarian Tourism Agency, ELTE/BME/Semmelweis, Investropa, Berlin & Munich Rent Index, Statistics Austria / EHL, own market and project analyzes (as of May 2026).

This article is purely for informational purposes and does not constitute investment advice. For individual decisions, we recommend professional due diligence and advice.