The real face of the Hungarian housing market in 2025 - detailed summary

This summary is based on a Bankmonitor podcast, in which Dorottya Pápai, Business Development Director of RE/MAX Hungary and owner of RE/MAX Go commercial real estate agency, and Balázs Sándorfi, founder and head of Bankmonitor, discussed the current state of the Hungarian housing market. The full conversation is available here: Túlárazás, licit, pofon: A magyar lakáspiac igazi arca 2025-ben.

Prices, psychology, segments and future prospects of the Hungarian housing market

The Hungarian housing market in the spring of 2025 will be extremely turbulent, characterised by a significant rise in prices, stagnating rents and an uncertain financial environment. The main factors driving changes in the housing market and key professional insights are summarised below.

Soaring house prices and psychological factors

• From autumn 2024 to the first quarter of 2025, annual house price increases and price appreciation in Budapest were 15-17%, and close to 10% on a quarterly basis, which surprised professionals; this is also reflected in the rising price per square metre.
• Prices of some panel apartments are already approaching HUF 100 million, which is unprecedented in the domestic market.
• Media reports have further fuelled expectations of price increases, with many sellers setting unrealistically high prices, often 10-15% above the realistic level.
• The behaviour of market participants is strongly influenced by psychology: many are waiting, hoping to sell their property at an even higher price, while buyers who are about to buy are also uncertain.

Methods and difficulties of price discovery

• The most commonly used method is market comparative pricing, which takes into account both transaction and supply data.
• The professional valuation always gives an interval (typically ±10%), and the exact price is determined on the basis of market feedback and the individual characteristics of the property.
• The yield-based approach is mainly used for investment housing in city centres, where the rental rate exceeds 50%.
• Dynamic pricing also occurs, but the real estate market is fundamentally slower to react to economic changes than, for example, the stock market.

Market segments: different dynamics, different opportunities

• Smaller apartments of 40-80 million HUF: This category is in strong demand, driven mainly by investors. Bidding and quick sales are frequent, especially for well-located, easy-to-rent apartments.
• Properties above HUF 100-150 million: sales are slower, there are fewer buyers and the average selling time is longer (up to 4 months). Good pricing is of paramount importance as overpriced properties are difficult to sell.
• Renovation: In addition to the price differential, there is also a significant uncertainty factor, as the cost and time needed for renovation is often unpredictable. Buyers often bargain hard and use any flaw as an argument.

Regional differences and mobility

The market is not homogeneous: Budapest and the conurbation remain attractive, while in many rural areas, especially in Eastern and Southern Hungary, demand is declining and sales are more difficult.

Mobility within the country is low, with most people moving within their own neighbourhood or to the Budapest area.

Demand around Lake Balaton, which was buoyant during the covid period, has now slowed down, with many new-build apartments finding it difficult to find buyers, while interest in classic holiday homes is growing.

Financing, lending and alternative investments

• Credit checks are becoming increasingly important as banks are scrutinising buyers' financial backgrounds, including gambling expenditure.
• Rental yields are falling: In Budapest, average yields have fallen from 5.2% to 4.4%, while house price trends show that house prices are rising but rents are stagnating or falling slightly.
• More and more people are considering alternative property investments, such as buying commercial premises, where renting can offer more stable returns.

Future outlook and experts' expectations

• In the short term, the wave of investment from sovereign debt is already abating and the market is expected to rationalise.
• Further price increases are likely, but not in all segments and not in all locations equally.
• In the medium to long term, house prices may continue to rise, but wage growth may catch up with prices over time, improving affordability.
• Changes in government housing policy, subsidies and the economic environment could have a significant impact on the market, but a new comprehensive housing strategy is not expected before 2026.

New build projects and trends

New-build residential projects will continue to play a dominant role in the Hungarian housing market in 2025. Modern technologies, energy-efficient solutions and sustainable use of materials are increasingly becoming a standard requirement for buyers. Developers are trying to adapt to changing needs, with community spaces, smart home systems and green environments being a priority for new investments. Despite rising prices, interest in new homes remains strong due to the quality of construction and long-term returns. All this shows that new construction will continue to play a key role in shaping the development and future of the Hungarian housing market.

Summary

The Hungarian housing market is currently overvalued, with many people targeting unrealistic prices due to psychological factors and media expectations. The market is segmented, with strong demand for lower-value housing and slow sales of more expensive housing. For housing to be renovated, uncertainty and the costs involved require significant discounts. Prices are expected to rise in the coming years, but the market is slowly rationalising and informed, professional decision-making by both buyers and sellers is becoming increasingly important.

Source: bankmonitor.hu