“The market has barely budged.” The current situation in the Hungarian real estate market

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«Рынок почти не сдвинулся с места». Актуальная ситуация на рынке недвижимости Венгрии

In 2023, the demand for real estate in Hungary fell very much, and the market actually froze. How is the situation now, what has changed and in which direction? Evgenia Konkoi, Head of Zsenya-Building Kft, shared with us the latest news on the Hungarian housing market. 

Recent developments in the Hungarian real estate market

— Evgenia, in our interview last year, we You discussed the state program of support for large families when buying a home. You mentioned that it is about to undergo changes, in anticipation of which the entire market froze. Please tell us how this program was eventually transformed and how did it affect the market?

«Рынок почти не сдвинулся с места». Актуальная ситуация на рынке недвижимости Венгрии

— Yes, since January 1, 2024, the social support program has been significantly reformed. Previously, large families received a gratuitous payment of 15 million forints (~$41,360) for the purchase or construction of housing at the birth of a third child. It was possible to take out an additional loan to this amount. After such a purchase, the property could not be sold for 5 years.

Now there is no such direct financial support. Instead, a preferential mortgage lending scheme has been introduced at a maximum of 3% per annum (maybe less). It is available for families who are only planning to have children for 10 years. At the birth of the first child, 5 million forints ($13,800) will be debited from the loan, the second child — 10 million, the third — another 10 million. That is, only 50 million forints can be written off from this loan, provided that four babies are born. But you need to understand that before they are born, the loan must be repaid independently.

It turns out that those who already have children have dropped out of the state support program altogether. Only if, for example, a family has two children and they give birth to the same number, then they will be able to get a loan from which they will write off 10 million forints for each of the two youngest children. 

However, there is another nuance that severely restricts families — very high income requirements. To get a loan of 50 million forints, you need a salary of at least 1.2 million forints per month, which is equivalent to 3500-4000 euros. There are practically no such high incomes in Hungary. Therefore, ordinary families with an income of 600-1000 euros do not meet the criteria of banks.

Because of this, the market is not moving anywhere, and people with insufficient income for such a loan have no options other than renting or buying a home in Hungary at the expense of savings and the help of relatives. 

— What other news is there on the Hungarian market?

— Another important information guide:On June 1, 2024, a new program for the repair and reconstruction of residential buildings will start in Hungary. This means that from this date, owners of houses and apartments built before 1991 will be able to receive a loan of up to 7 million forints ($19,300) for repairs.

What is the point: you need to submit your calculations to the bank, according to which the planned changes (replacement of windows, doors, insulation of the house, etc.) will lead to energy savings of at least 30% at home. The bonus for the residents themselves will be in smaller amounts for heating, which will need to be made as a result of such changes. 

To participate, you will need to deposit 1 million forints of your own funds. Then it will be possible to apply for a loan, from which 2-3 million forints will be written off after the repair and the achievement of this energy efficiency. 

But again, a fairly high income is required to obtain such a loan. For people with average salaries, banks are unlikely to approve participation in the program.

The salaries of local residents have literally devalued. 

The current state of the Hungarian market

— What is the general situation with activity and purchasing power in the market?

— Unfortunately, the situation has not changed much since last year — the market is still in a frozen position. 

The most popular housing format now is apartments of 50-60 square meters, and on the secondary market, as they are cheaper. As for new buildings, many of them have been in a frozen state since last year. We see especially many such projects in the 13th district of Budapest. Many developers declare bankruptcy. 

The fact is that in 2022, the demand for new buildings was very high, they were dismantled instantly at the stage of the “excavation”. On this wave, many developers took out loans and started building projects. But this was before the sanctions, that is, during the period of cheaper building materials and decent earnings. 

Now, the salaries of local residents have literally devalued: 350-400 thousand forints (€900—€1030) is very small compared to the prices of food and utilities. For example, 1 kg of bread now costs 3 euros, although previously it could be bought for 0.5 euros.

To tell you about the cost of communal services let’s take for example a house of 100 sq.m. If earlier a family living in such a house paid about 50 euros for light, now it is already 100 euros. Prices for gas have increased 5-6 times altogether — instead of the previous 80-100 euros, the payment for gas in such a dwelling will now be 300-350 euros per month.

Therefore, people are not thinking about buying an apartment right now — so far it’s just about how to live on the available funds. 

«Рынок почти не сдвинулся с места». Актуальная ситуация на рынке недвижимости Венгрии

— What is the situation with residential real estate prices?

— Prices have not changed much. Developers who built houses at the peak of high prices for building materials simply cannot afford to reduce the cost of apartments. It will be unprofitable for them. 

In Eger, the price per square meter remains at the level of 2050-2080 euros. In Budapest, the “square” costs between 2200-3200 euros, depending on the area. That is, all figures remain at the level of last year.

At the same time, German investors continue to demonstrate high demand. They remain among the most active on the market.

— What taxes are expected for buyers of real estate in Hungary during the acquisition and ownership of an object? 

— Until 2026, when buying a new apartment or house, the VAT rate is 5%. But then it will grow to 27%.

After the purchase, homeowners pay a utility tax every three months. Its size depends on the locality, but the average is 10 euros.

— What about the rental market? Are there any changes there?

— Rental rates in Budapest have decreased. If previously a two- or three-room apartment in a prestigious area was rented for 700-800 euros, now you can find options for 500-600 euros per month.

How to buy real estate in Hungary step by step and what nuances to take into account

— What are your forecasts regarding the further development of the situation in the Hungarian housing market?

— Now everyone is waiting for two important political events. The first is the parliamentary elections in Hungary on June 9th, and the second is the US presidential elections in November. Depending on their outcome, certain changes in the market may follow.

Also, much depends on the development of the conflict in Ukraine, as well as anti—Russian sanctions – their deepening or, conversely, partial cancellation can also significantly affect the economic situation in Ukraine Hungary and, accordingly, the real estate market.

Therefore, it is difficult to make any specific forecasts at the moment, but, of course, everyone hopes for the best.


«Рынок почти не сдвинулся с места». Актуальная ситуация на рынке недвижимости Венгрии

Yulia Yanukovych Editor-in-Chief

I am responsible for the work of the editorial office. I write expert interviews and guides.

Information provided by Zsenya-Building Kft Number of objects: 2 Number of publications: 2 Write to the company

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