Real Estate Investment in Budapest – What Buyers Should Know in 2026

Macroeconomic Drivers Behind the 2025 Boom

In the first half of 2025, several key macro indicators supported housing demand:

• Employment remained high
• Real wages continued to rise
• Household financial wealth increased relative to GDP
• Savings flowed from government bonds into real estate

The result: national housing demand increased by 5% year-on-year in H1 2025.

After the announcement of the Otthon Start Program, demand surged even before its September launch. By August, activity was up 46%, followed by a 37% year-on-year transaction increase in September.

Budapest has been at the center of this expansion.

Budapest Housing Market: Price Growth and Overvaluation

In Q2 2025:

• National housing prices rose 17.9% year-on-year
• By Q3, annual growth accelerated to:
  • 23.9% nationwide
  • 29.9% in Budapest

This places Hungary at the top of EU price growth rankings in nominal terms.

However, estimated data suggests that housing prices exceeded fundamentals by approximately 18.8% nationally by mid-2025. That means the Budapest property market is not only growing — it is stretching beyond income, rental yield, and credit affordability benchmarks.

What this means for investors:

• Capital appreciation potential remains strong in the short term.
• Medium-term price growth is likely to moderate.
• Selectivity is becoming critical.

Mortgage Market and Financing Options

In H1 2025:

• 808 billion HUF in new housing loans (+26% YoY)
• Nearly 40% of purchases involved credit
• Loan volumes rose mainly due to larger average loan amounts (driven by price growth)

Banks did not materially tighten lending standards, and 24% plan to ease loan-to-value limits due to competition.

Can foreigners or expats get a mortgage in Hungary?

Yes — with conditions.

Most Hungarian banks (with some exceptions such as UniCredit Hungary) accept foreign income if the borrower has:

• Hungarian citizenship
• Permanent Hungarian address
• Salary transferred to a Hungarian bank account

Additionally, three banks currently offer mortgages even with foreign address and foreign income, though under stricter underwriting.

This makes property investment in Budapest using a mortgage realistic — especially for Hungarian citizens working abroad or cross-border earners.

Is There a Real Estate Bubble in Budapest?

The data suggests overheating — but not systemic fragility.

Key differences compared to 2008:

• Mortgage-to-GDP ratio is significantly lower than during the crisis.
• Household indebtedness remains moderate.
• Financing is available.
• Most loans are fixed-rate and denominated in HUF.

Overvaluation does not automatically mean a crash.

More likely scenarios:

• Slower growth
• Real (inflation-adjusted) price correction
• Local oversupply pressure in new-build segment

Buyer Negotiating Power Has Weakened

With demand rising sharply:

• Median price deviation from last asking price:
  • Budapest: -1.5%
  • Rural areas: -3.7%

This means buyers in Budapest have limited room for negotiation.

The market has shifted toward sellers again.

New Build Market in Budapest

New construction dynamics are changing:

• Only 7,500 new homes received occupancy permits nationwide in the first three quarters of 2025 (14% less than 2024).
• However, building permits surged to a 2.5-year high in Q2.
• In Budapest, new condominium starts more than tripled year-on-year.

Average new-build price in Budapest (Q3 2025):

• 1.77 million HUF per sqm
• 15% annual increase

Only 17% of available new units currently comply with Otthon Start price caps — though 29% of newly launched projects do.

Investor takeaway:

Supply expansion is coming — but slowly. Oversupply risk may appear in specific micro-locations rather than city-wide.

Rental Yields: The Weak Spot

Rental yields have declined.

Gross yields are now around 3–3.5% annually, meaning a 30-year payback horizon in many cases.

This explains why investors in Q3 2025 appeared more on the supply side rather than buying aggressively.

For pure yield investors, Budapest is no longer a high-return rental market.

For capital appreciation investors, the story is different — but more cyclical.

Other Major Hungarian Cities

Large rural cities such as Debrecen, Győr, Szeged, Pécs and Kecskemét are also a strong alternative for investors.

• Debrecen: The second largest city in the country is a prime investment destination with its constantly expanding industry and international investments, such as the construction of the BMW factory. Property prices are rising but are still lower than in the capital.
• Győr: Known as the centre of the automotive industry, the city offers excellent labour market prospects and a stable real estate market. Its proximity to the M1 motorway increases its attractiveness for international tenants and buyers.
• Szeged: With its vibrant university life and affordable property prices, Szeged is an ideal investment destination, especially for those looking for rental apartments.
• Kecskemét: Real estate prices are rising because of automotive investments, such as the Mercedes factory, and the city's infrastructure development is also making it attractive to investors.
• Pécs: Although property prices are lower than in other cities, its role as a cultural and educational centre offers long-term opportunities.

Hungary's real estate market is diverse, offering investors a wide range of options, from luxury locations to emerging hidden gems. With careful planning and analysis, based on current market trends and data provided by Hungarian Central Statistical Office, a significant return can be achieved by choosing the right property.

Conclusion

Ultimately, the ideal Hungarian property hinges on your individual needs and goals. By carefully weighing your budget, purpose, desired lifestyle, and the legal requirements, you can confidently invest in a property that brings you long-term satisfaction.

With substantial household savings and maturing government bonds, 2025 is expected to see increased investments in housing, further bolstered by the tax-free use of voluntary pension savings for housing purposes.

Take the next step towards your Hungarian property dreams. Contact us for comprehensive resources and expert guidance on navigating the Hungarian real estate market!