Everything About Buying Property in Hungary: from Statistics to Transaction Execution

Real estate in Hungary is becoming more expensive, but it still remains one of the most affordable compared to other EU countries. From our guide, you will learn about the situation with sales volumes and prices on the market, how to buy real estate in Hungary step by step, and what additional costs you should expect.

Foreigners can buy real estate in Hungary, except for agricultural land and architectural monuments. But to make such a purchase, you must obtain permission from the Land Committee, and through lawyers accompanying the transaction. But do not be afraid: this is more of a formal step, since they can only refuse due to a criminal record in Hungary.

Citizens of Hungary do not need to obtain permission; citizens of the European Union, as well as Norway, Liechtenstein, Iceland, and Switzerland; and citizens of any country to whom real estate is inherited.

Also, such permission is not required if the purchase is made by a legal entity.

Sales volumes in the Hungarian real estate market

According to the Central Statistical Office of Hungary, 89,965 residential properties (including apartments, single-family homes, and townhouses) were sold in 2023, which is 34.8% less than in 2022. Among the regions of Hungary, the largest sales volumes were traditionally observed in the capital, Budapest, where almost 21 thousand housing units were sold. This is the lowest observed figure since 2007. The least amount of housing was sold in the Pest region — 6591.

According to the results of 2023, the share of the secondary market in the residential real estate market in Hungary was 96%, and the primary market — 4%. In total, 3,431 residential properties were sold on the primary market, of which 49% were sold in Budapest. Sales volumes on the primary market in 2023 fell almost 3 times compared to 2022, when 10,273 properties were sold on the primary market.

The Hungarian Central Statistical Office has not yet published data on the number of homes sold for the first and second quarters of 2024, but the National Bank of Hungary reports the following in its housing market report for May 2024: in the first quarter of 2024, the number of sales nationwide increased by 30% compared to the first quarter of 2023 (24,139 residential properties were sold in Hungary then). The National Bank also reports an increase in demand.

According to the National Bank, the increase in sales was accompanied by a revival of housing lending: for example, in January–March 2024, the number of concluded housing loan agreements was twice as high as a year earlier. Such lending volumes were possible due to the following factors: deflation in the country, a decrease in interest rates on loans, and the resumption of subsidies for housing construction.

Housing price growth rate

Hungary maintains the highest rate of house price growth in the entire European Union: since 2015, house prices in the country have increased more than 2.7 times, while in neighboring countries, prices have increased on average by 1.7 times.

The most expensive real estate is in the capital. According to the results of the 4th quarter of 2023, the average price per square meter on the primary market was 3562 EUR/sq.m, which is 19% more than in the previous period. On the secondary market, one square meter cost 2434 EUR/sq.m, which is similar to the 3rd quarter of 2023. In the 4th quarter of 2023, prices for apartments on the primary market were on average 46% more expensive than on the secondary market.

Single-family houses, townhouses, and apartments in residential complexes are also popular on the capital's secondary housing market. The dynamics of price changes for these types of housing are presented below.

The Central Statistical Office has not yet published the average purchase and sale prices of housing for the first and second quarters of 2024, but given that the volume of housing loans in the country has increased and the overall economic situation has improved, it can be assumed that prices will rise. The price growth is also confirmed by the price index on the housing market.

According to preliminary data for the first quarter of 2024, prices on the primary market increased by 3% compared to the fourth quarter of 2023, and on the secondary market, prices increased by 5.3%. Housing prices can vary significantly, depending on the region. Below is a table with average prices for residential real estate by region and type of housing on the secondary market for the fourth quarter of 2023.

Housing prices by region depending on the type of housing, EUR/sq.m:

Housing prices by region depending on location, EUR/sq.m:

Based on the Hungarian National Bank's report on the residential real estate market in May 2024, it can be said that the market has revived at the beginning of the year. An excellent support for this was the improvement of the economic situation in the country, the reduction of interest rates and the resumption of subsidies for housing construction. It can be expected that in the coming months, market activity will only increase and, in general, 2024 will be much more productive than 2023.

In terms of investment, the Hungarian residential real estate market can be attractive to those who are ready for long-term investments. It is also worth noting that housing prices in Hungary are among the lowest in the entire European Union, and Budapest is one of the cheapest EU capitals.

Associated costs when buying real estate in Hungary

When buying real estate in Hungary, you should expect additional expenses that will amount to about 10% of the property's value. Here are the items they consist of:

• Transfer tax. It is equal to 4% of the property value if its price does not exceed €2.6 million, and 2% if the property is more expensive. This tax is paid within 90 days after the transaction is concluded.
• VAT for buyers of new buildings. It is 27% and is usually already included in the price of the property.
• Administrative fees: for obtaining permission to purchase real estate — from €170 to €200; for vetoing real estate transactions — €60; €30 for an extract from the cadastral register; €22 — a homeowner's passport.
• Fees for lawyers, realtors and notaries — they usually amount to no more than 5% of the property value.

Buying Property in Hungary Step by Step

So, what do you need to do to buy real estate in Hungary:

• Contact lawyers. As it turns out, without this step, foreigners will not be able to buy real estate in Hungary. Only lawyers have the right to register a purchase and sale agreement, obtain a purchase permit, and obtain the property owner's passport.
• Select and reserve a property. Viewing can be organized both in person and remotely. Then you need to send an application to the seller and pay 1% of the total amount as a deposit; this way, you reserve the desired property.
• Check the property. The lawyer is responsible for the legal verification - he checks the title, as well as the presence of debts and other encumbrances.
• Conclude a preliminary agreement and make an advance payment. The lawyer draws up a preliminary purchase and sale agreement in Hungarian (an interpreter can participate in the process at the request of the parties). This document specifies all the details of the transaction: technical characteristics of the property, amount, address, responsibilities of the parties, and so on. When signing, the buyer makes an advance payment of 10–15% of the cost of the property (if the buyer refuses the transaction, this amount is not returned to him).
• Obtain permission to purchase. Next, lawyers make a request to the Hungarian Land Office for permission to purchase. During this period, the agency vetoes any transactions by the owner with the selected property.
• Pay for the property and close the deal. After receiving permission, you need to conclude the main purchase and sale agreement. Then the buyer transfers the remaining amount to the seller (both cash and non-cash payments will do).
• Register the ownership. After the successful completion of the transaction, the lawyer notifies the land registry about it. The point in this process is the change of the owner's name on the property card.