Why has the real estate market in Hungary come to a standstill? What changes do all industry players expect? Which foreigners buy real estate in Hungary most often, and for what purpose? How much can you buy an apartment for in Budapest and other regions of the country? Where can one buy a house in Hungary inexpensively? Read our big interview with the head of Zsenya-Building Kft., Jevgenyija Konkoly. 

“In Budapest, apartment prices depend strongly on the neighborhood.”

— How does the real estate market in Hungary differ from others? What are its peculiarities? 

— I am not familiar with other markets, but I can note that Hungary is a small country, so the market is mostly concentrated around its capital and, coincidentally, the biggest city—Budapest. And its surroundings, of course. Yes, there are still some historical cities where real estate is popular, but there is no such activity. 

— What has changed in the Hungarian real estate market in recent years?

— The changes, of course, occurred after the Western countries imposed sanctions against Russia—prices for building materials increased 3–5 times already in the first months after February 2022. In addition to the sanctions, the increase in gas and energy prices, which are necessary for the production of these building materials, also played a role. Thanks to all this, real estate in Hungary has become very expensive. 

Price growth started to be significantly reflected in the market in the second half of 2022—the beginning of the year was relatively active. This was especially true for those projects that were at the stage when a lot of construction materials were no longer required. Also, those companies that had time to purchase construction materials in advance—there were enough of them. From my personal experience, I can say that we, as real estate developers, purchased most of the construction materials in 2021. However, of course, it was only enough for a while. 

To illustrate the change in prices, the first apartments in the seven-family house that we started building in 2021 in Eger (northern part of the country) were sold at prices 30–40% lower than those that are still on sale and are being sold now. That is, if at the beginning of 2022, a square meter in Eger cost 650 thousand forints ($1780), it is now 100 thousand more expensive—750-760 thousand forints ($2050-2080). 

Therefore, in 2023, the demand for real estate in Hungary has fallen very low, and the market has frozen. 

This was also helped by the news that the social program in Hungary for large families will be abolished as of January 1, 2024. Its essence in its current form is that families with three children or more can receive social support of about 15 million forints (just over $40,000) to buy or build a new apartment or house. That is, the government has now announced that this support system will be completely changing, and they promise that for the better. Therefore, people are now “frozen” and waiting for these innovations.

— And how have the prices for apartments in Budapest changed? 

— In Budapest, everything depends on the neighborhood; there are 23 of them in the capital. For example, in the 5th district—the very center of the city—the prices were and are very high. The cost per square meter here is 1 million–1 million 200 thousand forints ($2735–$3280); that is, a small apartment of 40 square meters will cost about 45–50 million forints ($123,000–$136,800). 

Another prestigious neighborhood is Buda in the western part of Budapest. This is already the first district, and there the prices for apartments are very high as well: a small one-room apartment can be bought for 60–70 million forints ($164,000–$190,000), which is such a high price that you can build a whole house somewhere else.

It is important to note that everything here relates to brand-new construction. If you look at the “secondary” in a prestigious area, the price per square meter will already be within 900 thousand forints ($2460). Again, it should be understood that prices in prestigious areas will also depend on each specific location: on what street the apartment is located, whether there is a parking lot, etc.

But there are other, also popular, areas where you can find cheaper apartments—say, the 13th district, which is not far from the center. For a square meter in a new building here, you can give 800 thousand forints ($2200), which is about 48–50 million for a good one-bedroom apartment of 60 square meters (about $132,500–$138,000). If the apartment is not new, it is much cheaper to buy—30–35 million forints ($82,800–$96,500) for a one-bedroom apartment, which may need to be renovated. 

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“A private home in upscale cities can cost anywhere from $200,000 to nearly $1 million.” 

— What can you say about private houses? In which regions is there a demand for them, and how much do they cost?

— Private houses have always been and still are in demand in prestigious neighborhoods, such as the first one. Also, such real estate is in demand in the vicinity of Budapest (within 10–15 km), as it is quiet and, at the same time, not far from the capital. Such towns include Pomáz, Szentendre, and Solymár. 

Prices for private houses here are much higher than in other regions of Hungary. But it also depends on the location; for example, houses with a panoramic view of Budapest will cost more. Say, a house of 120 square meters with a plot of 600–700 square meters can be bought for 90–150 million forints ($246,000–$410,000). 

Even more expensive will be houses with solar panels, a swimming pool, a jacuzzi, or a sauna; the price of these can reach 250–300 million forints ($684,000–$820,000). But 300 million, it seems to me, is already the ceiling in such cities; this price is more likely for a villa of 200 square meters with a large, beautiful plot, garden, and other things. 

— Where can you find the cheapest real estate in Hungary? 

— If we talk about cheap apartments and houses, they can be found only outside Budapest, 150–160 km away from the city. This applies specifically to the northern and eastern parts of Hungary—the western part will be more expensive as there is more work and better wages.  

The cheapest real estate can be found in the villages of Hungary, also in the north-eastern part of the country. Starting from the town of Hatvan and below, real estate will get cheaper: in this part of the country, you can buy a private house with a plot for 5–6 million forints ($13,800–$16,500), and if brand new with a good plot and garden, for 15-20 million forints ($41,000–55,000). For comparison, for this money, you can buy only half an apartment in Budapest. 

By the way, as for apartments, they are not usually built in settlements because it is not profitable for developers. In such small settlements, people build their own houses. 

Of the not-too-big cities away from Budapest, apartments are built in towns like Miskolc, Eger, Gyöngyös, and Debrecen. 

“Mortgage interest rates are now at 18-20%.”

— Now let's move on to foreigners. How can a foreigner buy real estate in Hungary? What are the nuances of this plan in general? What does this process look like? 

— A foreigner can buy an apartment or a private house in Hungary if he has a residence permit. 

To get a residence permit in Hungary, you need to have a permanent residence registration in the country, a tax number, prove your financial solvency (to have on a private bank account about 3 million forints—about $8300), and have sources of income in Hungary or any of the EU countries. It is also possible to get a residence permit for the purchase of real estate, but the amount in this case must start at 155,000 euros.

Then the principle of buying real estate in Hungary is standard for both Hungarians and foreigners: a lawyer draws up a contract in two languages, and then all this is certified by a notary.

Foreigners can also take a loan in Hungary—both EU and non-EU citizens. Everything, of course, depends on the bank, but there is such a possibility. However, for this, it is also important to have a residence permit. 

As for interest rates on loans, they are also now very high in Hungary—18–20%. Earlier, they were issued under the social support program, and the interest was at a level of 5–7%, but now banks simply do not issue them, as it is not profitable for them. 

However, just the other day, our country introduced a law according to which the down payment on a loan was reduced from 20% to 10%. So, for example, there is a young family that wants to buy an apartment for 30 million forints ($83,000) and takes out a loan for this purpose. It turns out that now, as a down payment, they will only need to make 3 million forints ($8300) instead of 6 million ($16,500).

“Germans are the most active foreigners on the Hungarian market.”

— Which foreigners buy real estate in Hungary most often, and for what purposes?

— Germans. They usually buy real estate in the vicinity of Lake Balaton and in Budapest to further rent out. Also, in the last 2–3 years, a lot of Germans moved to Hungary because of the huge influx of refugees to Germany. This trend is still going on.  

Many foreigners buy apartments to rent out to students. This type of investment is popular with investors in student cities such as Eger and Miskolc. 

Another way to earn money is to buy inexpensive apartments that are to be renovated or those that are put up for auction by banks (due, for example, to loan arrears) and then resell them.

— And how much can you earn from renting out housing? 

— Now the prices for renting an apartment have risen slightly due to the increase in energy prices. In Budapest, you can rent an apartment, say a two-room apartment of 60–65 square meters, for an average of 200,000–250,000 forints ($550–$700) a month. 

In Budapest's cheapest neighborhood for rent, 8th, you can find apartments for 150–180,000 forints ($413–$500) a month. It is cheaper here, as it is not the safest neighborhood. In the most expensive districts of the capital, of course, there are no limits: you can rent apartments for a million forints and for two ($2760–$5520). 

If we take the whole of Hungary, the cheapest rent is, again, in the northern part of the country: 100–150 thousand forints ($275–$500) per month. For 200 thousand forints ($550), you can rent a whole house here.  

— What, in your opinion, can be expected in the future on the market? 

— As I have already mentioned, all players in the Hungarian real estate market are now expecting changes for the better—the construction industry in the country has stopped. And if the construction industry stops, the country's economy also declines, and the standard of living drops. For example, in the neighborhood of Eger, where we are working at the moment, many building material stores have already closed down. Consequently, there are no sales since there is no construction.  

Until November 15, 2023, the country must hold a vote, which will determine how social support will be changed starting January 1, 2024. The government promises that these will be positive changes. Therefore, everyone is now frozen and eagerly awaiting the news.