Real Estate Market in Budapest: Trends for 2024-2025

18th November 2024

The real estate market in Budapest continues to attract international buyers in 2024, driven by an appealing golden visa program that grants guest investor residence permits for properties worth €500,000 or more. Known as a safe and welcoming city, Budapest has become a hotspot for property buyers from around the world. In this article, we explore the current market trends of 2024 and share our predictions for 2025.

What are the benefits of investing in Hungary’s real estate market?

Before discussing Budapest’s real estate market in detail, let’s look at why more and more international buyers choose to invest in Hungarian properties each year.

Strong returns on investment

In the past 14 years, Hungary’s real estate market has shown one of the highest returns among European Union countries. House prices in Hungary have more than tripled from 2010 to 2024, with an average increase of 218%. Budapest, as the capital, has outpaced other Hungarian cities in returns, consistently delivering impressive returns for investors.

Source: Eurostat

Easy, low-bureaucracy process

As explained in our guide to real estate investment in Hungary, the purchasing process is quick, simple, and accessible for all foreign buyers. Hungary also has a favorable tax environment compared to many European countries. VAT on newly built properties is just 5%, and second-hand apartments are VAT-exempt. The wealth transfer tax is 4% of the property’s market value, dropping to 2% for amounts over HUF 1 billion, with a cap of HUF 200 million.

Stable legal and economic environment

Hungary, a member of the European Union and the Schengen Area, provides a stable and welcoming legal and economic setting for international investors. The Hungarian Central Statistical Office (KSH) reports that the number of foreign real estate buyers has risen by 36% since 2020. Non-EU buyers make up 3% of all transactions in Hungary, with Budapest being the top choice among them.

Residency permit options for international buyers

Through Hungary’s guest investor program, international buyers can obtain a residency permit by purchasing residential property worth at least EUR 500,000. The property must be free of any claims, non-contested, and solely for residential use. Properties can only be acquired from January 1, 2025, with a five-year holding period required before selling or placing liens on the property. This investment can be made by the investor or jointly with immediate family members, such as a spouse or minor children.

Real estate market in Budapest: 2024 trends

The real estate market in Budapest saw substantial growth in 2024. Below, we highlight the most important metrics on recent changes.

Real estate prices in Budapest are on the rise

According to the latest report from the KSH, the national average real value of second-hand properties rose by 78% in the second quarter of 2024, while new properties saw a 113% increase compared to 2023.

As shown in the chart below, property prices have steadily and significantly risen over recent years in the country.

Source: KSH

Price increases in Budapest generally outpace the national average. Research by Ingatlan.com, Hungary’s leading real estate platform, analyzed recent price trends in Budapest. The charts below illustrate the price changes for parcels, apartments, and houses in Budapest from 2019 to 2024.

 

Source: realrstatehungary.hu

KSH’s report notes that the average cost of a new apartment in Budapest reached HUF 79 million in 2024, up by HUF 7.9 million from 2023. Real estate prices in Budapest are more than 26% higher than the national average.

The KSH report notes that price increases in Budapest are uneven, with districts in Buda experiencing higher rates of growth than other areas.

“In Budapest, the average price per square meter is close to HUF 1.5 million. The XI district recorded the highest sales of new apartments, with an average price of HUF 101 million, or HUF 1.8 million per square meter. Apartments in the hilly Buda districts had even higher averages, with prices around HUF 170 million and HUF 2.3 million per square meter. Even in the outer districts of Pest, prices exceeding HUF 1 million per square meter have become common.”

Supply is slowly increasing in Budapest’s real estate market

The number of properties available in Budapest has been growing steadily. According to KSH, there were 909,962 properties in 2015, compared to 969,208 in 2024, an average annual growth of 0.72%. Meanwhile, Budapest’s population has slightly declined during this period. In 2015, the city had 1.76 million residents, but by 2024, this number has decreased to 1.62 million, representing an approximate 8% drop.

Real estate market in Budapest was highly liquid in 2024

Budapest represents 41% of all property transactions in Hungary, making it an attractive market for international investors, who can typically find the type of property they’re looking for with ease. The city offers a diverse range of options, from affordable condos to luxurious penthouses.

Central Budapest is most popular among foreign investors

According to KSH, Budapest is the most popular Hungarian city for foreign investors, with central districts especially favored. 9.1% of all property buyers in Budapest were foreign nationals, with this percentage rising to 22% in the inner districts of Pest. In terms of the total transaction value, foreign buyers accounted for 12% citywide and 28% in central Pest.

The largest groups of foreign investors buying apartments in Hungary were from:

• Germany: 1473
• Slovakia: 655
• Romania: 632
• United Kingdom: 601
• China: 588
• Netherlands: 411
• Austria: 315
• Vietnam: 267
• Russia: 141
• Ukraine: 131
• Belgium: 105
• Italy: 102
• Switzerland: 100
• France: 93
• Israel: 91
• Other EU countries: 226
• Other countries: 322

What to expect in 2025?

Most real estate experts expect Budapest’s property market to keep growing strong in 2025. In interviews with 11 experienced agents, conducted by Portfolio, they predict that property prices in Budapest will rise. For used apartments, the increase is expected to be between 4% and 13%, with an average rise of around 7-10%. New apartments could see a price hike of 4% to 15%, with a typical increase of about 9%.

Experts also believe that the number of property transactions nationwide could go up by 20-30%. Since Budapest usually makes up about 40% of all transactions, the city is likely to see a big jump in activity.

Professional support for your real estate investment in Budapest

Crystal Worldwide Group is an international law firm specializing in residency by investment, tax planning, and wealth protection. Get in touch with us for a safe investment process and expert assistance with securing your residency permit.

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