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What is the return on rented properties in Budapest? And how is the development?

While rents in the central districts of Budapest are in the European midfield and on par with cities such as Frankfurt and Brussels, for example, purchase prices are at least 50% lower. As a result, rental yields of over 5% are the norm.

Recent figures show that real estate prices increased by 104% between 2015 and the end of 2021, despite the Corona pandemic(source). Since then, prices have moved much less dynamically, although a recovery is expected in the second half of 2024.

Relevant news for real estate in Hungary

Source: Corvinus University of Budapest

Growing demand, limited supply: Why student housing in Budapest is a lucrative investment opportunity

02/05/2025

In recent years, Budapest has developed into one of the most attractive university locations in Central and Eastern Europe. The Hungarian capital offers a mixture of first-class universities, a comparatively low cost of living and a high cultural standard of living. Budapest is a particularly popular destination for international students – and the trend is rising. However, as the number of students increases, so do the challenges, particularly on the housing market. The acute shortage of suitable student housing opens up a striking opportunity for private investors.

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Tourism in Budapest 2025: Rising numbers, luxury hotel boom and slowdown in short-term rentals

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Budapest remains a magnet for international tourists and continues to develop dynamically in 2025. In 2024, the city already experienced a 24% increase in foreign tourists, who account for 87% of the 14.7 million overnight stays in the capital. The city and the government are reacting to this development in contradictory ways: with the opening of new hotels, the city’s supply is growing, while at the same time new regulation of short-term rentals is likely to lead to a shortage of private Airbnb accommodation.

Rental yields in Budapest

The gross rental returns in Budapest are very good in a European comparison. In Buda, the greener side of Budapest, apartments have relatively higher returns, ranging from 5.63% for a smaller apartment of 90 square meters to 5.73% for a larger apartment of 120 square meters, based on one Examination of the Global Property Guide . Apartments in Pest, the business and commercial center of Budapest, have slightly lower rental yields of between 5.16% and 5.24%.

Average monthly rents for brick apartments in Budapest in 2019 ranged from HUF 2,400 (€ 6.7) to HUF 3,600 (€ 10) per square meter (m²). Districts 13, 5 and 1 were the most expensive areas, while Districts 4 and 10 and the outlying districts on the Pest side were the cheapest.

Rents for apartments have developed differently in Budapest. In most districts, rents rose between 5% and 10% in 2019 compared to the previous year, according to the Housing Market Monitor Q4 2019 from Otthon Centrum. In districts 1, 2, 3, 11 and 12 in Buda and districts 10 and 14 in Pest, rents rose by more than 10% last year.

Apartments and shared rooms for students and digital nomads play a special role – here, prices per square meter are significantly above the local level, and tend to be between 15-25 EUR/sqm. Click here for a video on the topic.

entwicklung kaufpreise europa 10jahre - Immobilien in Budapest

The increase in the value of real estate in Hungary is mainly driven by Budapest – over 90% since 2010.

Preisentwicklung Immobilien Ungarn 2015 - 2022

Purchase prices for real estate:
Strong performance since 2010

In the years since 2010, the average apartment and house prices have risen by over 90%, which means a very dynamic development even compared to Germany, although it is also starting from a much lower level.

And, despite continued robust growth, “compared to the size of the economy, this means that it still plenty of room for growth there, “said the central bank in their Housing market report from June 2020 . “Accordingly, the depth of mortgage loans in Hungary – next to Romania – is the lowest in an EU comparison.”

Development in times of war in Ukraine, inflation and high interest rates

After property prices rose by 104% between 2015 and the end of 2021(source), the price increase has slowed significantly – by 10% between 2022 and 2023, for example.

The unusually high equity ratio for real estate purchases in Hungary reduces the effect of rising interest rates on the real estate market – this has a particularly problematic effect on construction activity, i.e. new construction projects are being slowed down.

For existing properties, this means that their value will increase in the long term.

An upturn is expected in the second half of 2024, which could also be due to an increasing number of Asian buyers entering the market. Chinese investors, for example, were completely absent in 2020 – 2022 due to the pandemic.

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Budapest
Invest

Choose your date to get to know each other -
of course free of charge.

Communication takes place in English at all times –
also for appointments on site in Budapest.