According to analysts quoted by Portfolio, Hungary has been operating well below its potential in recent years: low transaction volumes have masked a significant accumulation of unmet demand. Now, with a more investor-friendly policy course, improved economic prospects and a statement of ambitions to join the eurozone, new capital inflows can be expected, especially from regional players such as the Czech Republic.
In recent years, about 80% of real estate transactions in Hungary have been carried out by local investors, largely due to the withdrawal of Western capital. This trend may change soon.
Experts stress that restoring trust will strongly depend on economic stability, access to EU funds, and clearer regulatory conditions. The potential switch to the euro also promises to be one of the key factors for increasing investor interest.
The first wave of returning capital may be more speculative: Hungarian investors who previously looked abroad are likely to re-enter the domestic market. This will be followed by regional funds, especially from the Czech Republic and Poland, where capital raising remained more active. Large institutional investors are expected to return more cautiously, focusing primarily on high-quality assets that meet ESG standards.
It is expected that different segments of the Hungarian real estate market will develop in different ways:
- Industrial and logistics sector.Hungary has successfully positioned itself as a meeting place for Eastern and Western foreign direct investment. The industrial real estate market remains the most active, although future policy may shift the focus from megaprojects to support small and medium-sized enterprises.
- The office market.Budapest continues to attract highly profitable service industries and service centers. However, the fate of about 450,000 sq. The nature of the planned government projects remains unclear, which creates uncertainty.
- Hotels.&Despite the growing tourist demand, Budapest still lags behind Vienna and Prague in terms of the number of hotel places. Significant expansion of the sector is expected.
- Retail trade.The sector has faced a heavy regulatory burden, resulting in the lowest density of retail space in Central and Eastern Europe. The development was very limited.
- Residential real estate.The shortage of supply pushes prices up. Hungary builds less than 2,000 new apartments per million inhabitants per year, which is much less than in Poland or Slovakia.
Although Hungary's legal system is generally sound, experts stress that increased transparency and predictability can quickly restore investor confidence. The new government has the opportunity to implement rapid reforms, addressing long-standing issues such as complex pre-emptive purchase rights, special investment regimes, and the controversial plaza stop rule that restricts large retail developments.
Experts agree that a real return to liquidity will be more important than just political statements. Some investors have already shown interest in entering the Hungarian market, but many deals were previously disrupted due to the discrepancy between the expectations of buyers and sellers, as well as regulatory uncertainty.
Residential real estate sector
The housing market today is showing a growing gap between prices and demand. In Budapest, the price of around 100 million forints (275,000 euros) per apartment, once considered a psychological threshold, has become the norm. About 40% of ads fall into this category, but only a quarter of buyers expect this amount. This gap is particularly noticeable in some regions, including the vicinity of Lake Balaton. In the luxury segment, premium real estate in Budapest now usually costs from 200 million HUF.
Forecast
The combination of political changes, the potential transition to the euro, and accumulated investment demand could lead to a significant market recovery. However, structural issues (housing affordability constraints, regulatory complexity, and supply shortages) will continue to affect the sales trajectory.
Source: Daily News Hungary
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