But this growth is at the expense of domestic demand. In recent years, about 80% of real estate transactions were made by Hungarians, while “Western capital” was in retreat. Under the new prime minister, Peter Magyar, it may return.
According to Prian, the main factors that could change the market are the following
improved economic stability; access to European funds; more transparent rules for investors and Hungary’s possible move towards the eurozone.
According to local experts, Hungarian investors who have been withdrawing capital abroad will be the first to return. The funds from the Czech Republic and Poland, where the capital market now feels more confident, will follow.
At the same time, large international institutional players will act cautiously and, first of all, look at high-quality ESG-assets (Environmental, Social, Governance).
“Three pillars of Hungarian real estate
According to Prian analysts, industrial and logistics real estate remains the strongest area. Hungary continues to attract manufacturing and international companies due to its position between East and West.
Budapest’s office market is still resilient due to IT, service centers and international companies, but the uncertainty surrounding some government projects creates risks.
The hotel sector looks promising. Tourist demand is growing, but Budapest is still noticeably behind Vienna and Prague in terms of hotel rooms. In the coming years, the market may get about 24 thousand new rooms.
Retail real estate remains one of the most regulated segments. Development of large retail properties has been limited in recent years and Hungary now has one of the lowest retail densities in Central and Eastern Europe.
The weakness is the housing market
Hungary builds less than 2,000 new homes per million inhabitants per year, well below Poland and Slovakia. Limited supply continues to support price growth.
In Budapest, housing around 275 thousand euros, which used to be considered an expensive segment, is gradually becoming the norm, as well as 5 thousand euros per square meter. Already about 40% of offers are in this price category, although the real demand is noticeably lower.
Still, the main signal of recovery will not be political statements, but the return of liquidity and growth in the number of real transactions. If foreign capital really starts to return, Hungary may move to a new growth cycle.
