Property prices in Budapest have seen exceptionally strong growth over the last ten years. According to the Global Property Guide, real estate prices in Hungary rose by over 230 %which corresponds to an average annual increase of around 13-14 % corresponds.
Deflated by the consumer price index (CPI), this results in a real average annual real average annual increase in value of around 7-9 % for Budapest for Budapest – depending on the source and reference period.
2008-2013: decline as a result of the financial crisis
Between 2008 and 2013, Hungary – like many other countries – experienced a significant drop in prices on the real estate market. The global financial crisis hit Budapest particularly hard: buyer confidence fell, loans became more difficult to obtain and many planned construction projects were put on hold. The decline was particularly sharp for existing properties in poorer locations or in need of renovation. Prices fell by 20-30% depending on the location – and in many cases they only recovered years later.
From 2014: Dynamic recovery and appreciation in Budapest
From around 2014, a sustained recovery began, driven by economic stabilization, growing domestic consumption, improved credit availability and growing international demand. From 2016, Budapest – especially the inner-city districts – recorded particularly strong price growth. Driven by investors, students, expats and waves of modernization, many old apartments were renovated and rented or sold at higher prices. During this phase, property prices in Budapest rose by 10-15% per year in some cases, and between 2014 and 2023 the cumulative price increase in Hungary as a whole was over 230%.
2020-2025: Stabilization at a high level with moderate growth
Despite global challenges such as the coronavirus pandemic, supply chain problems and the war in Ukraine, the real estate market in Hungary remained surprisingly stable. Although a short-term decline in transactions was noticeable in 2020, prices largely held up – and continued to rise from 2021, albeit at a somewhat more moderate pace. Refurbished apartments in old buildings in good inner-city locations in particular – in Budapest, for example – proved to be crisis-resistant. In 2024, the market once again recorded a noticeable upturn with prices rising by around 5% compared to the previous year. The long-term trend remains positive, even if short-term fluctuations cannot be ruled out depending on the economic situation.
2025: Special promotion for first-time buyers drives the market
In 2025, the Hungarian government launched the “Otthon Start” program, which offers first-time buyers low-interest financing with a fixed interest rate of just 3% for up to 25 years. According to official information, loans of up to HUF 50 million (≈ €125,000) can be applied for.
According to government guidelines, the permissible upper limit for the purchase price is up to HUF 100 million (~€250,000) for apartments and HUF 150 million (~€375,000) for houses.
This promotional instrument has already boosted demand in the short term: an analysis shows that demand rose by around 20 % just a few weeks after the announcement.
However, market observers warn that this program is part of a pre-election stimulus package and that its continuation cannot be guaranteed.
For investors, this means that an additional surge in demand could drive up prices in sought-after locations in the short term – at the same time, there is a risk that the stimulus will be terminated, modified or restricted, which is why realistic yield planning is recommended.
Our conclusion
Prices in the Hungarian capital remain low by European standards (metropolises / capitals), which means that there is considerable potential in central locations and locations close to the city center.
The price trend in the capital due to the subsidy program (19% in the current year) is a clear exaggeration that could be followed by a correction if the program is discontinued. However, we do not believe in a massive correction, but rather that sellers will have to adjust their sometimes unrealistic price expectations downwards or wait patiently.
We also assume that price dynamics will flatten the higher prices rise – and assume an average scenario of 4.5% for the next 5-10 years in the core area of the city of Budapest for our yield calculations – after deducting inflation.
For rents, we assume an increase of 3% p.a. in yield calculations, which is above the Hungarian central bank’s inflation target and well below the increase in rents in Budapest recorded to date.
Sources
The figures are supported by several independent data sources, including:
- MNB (Hungarian National Bank)
- BIS (Bank for International Settlements) / FRED Database
- Global Property Guide
- FHB Housing Index
- Otthon Centrum (Market Report Budapest)
