Last year’s real estate market, after the weak period of 2023, presented a real roller coaster ride, László Balogh, the leading economic expert of ingtalan.com, told Népszava. At the beginning of last year, traffic was still characterized by the stagnation characteristic of 2023, which then turned into a serious increase. Customers who postponed their purchases last year also appeared. The momentum ran out again in the summer, which then rose again in the fall. Among other things, these buying waves were supported by state subsidies and the decrease in loan interest rates, he added. Also, the fact that the previously very attractive government bond market’s declining yields due to falling inflation made it less attractive to investors. Some of the funds released in this way ended up on the housing market, boosting demand. In addition, many buyers for their own purposes also entered the market in autumn. It became widely known that the interest rates will not be more favorable in the near future, so those who wanted to buy real estate felt that the time had come. They were the ones who brought their purchases forward from 2025 – explained the real estate expert. Last year’s real estate market can almost be put into a frame, because on one side it was characterized by purchases postponed from 2023 and on the other by purchases brought forward from next year. The latest housing market report of the Magyar Nemzeti Bank (MNB) adds to this that in the third quarter of autumn, which brought another economic boom, as mentioned by László Balogh, the turnover of the housing market nationwide increased by 16 percent, while in Budapest it increased by 31 percent year-on-year. The central bank also mentions the high loan amounts available under the CSOK Plusz among the items that bring an extra impulse.
The combined effect of all this was that – in an annual comparison – until February last year, the rate of price increase was barely 2 percent, which had risen to 4-5 percent by the summer. As a result of the new wave of demand in the fall, this jumped to 6-8 percent, and then reached 10 percent in October-November, the ingtalan.com expert continued.
Last year’s rental market took a slightly different course. There, the rents showed a continuous increase until autumn. After that, however, by October and November, this momentum ran out, and even if only to a small extent, a decrease of 0.5-1 percent could be registered on an annual basis – indicated László Balogh. By the end of the summer, prices in the apartment rental market had risen by 9-10 percent, which has now decreased to 7-8 percent in Budapest and nationally.
Regarding rural developments, the specialist singled out two hubs, Debrecen and Szeged. The former is the location of the BMW factory, and the latter of the Chinese-based BYD factory. Serious changes have already started or taken place in the cities. In the seat of the Csongrád-Csanád county, the situation can be said to be the calm before the storm, but Debrecen can serve as a good example for future developments. In the center of Hajdúság, in 2018, when the installation of the BMW factory was announced, the average square meter prices were around HUF 400,000, which have now jumped to over HUF 800,000. And this corresponds to the price level experienced in the outer districts of the capital.
Here’s the report: It’s getting harder and harder to get an apartment, housing prices in Hungary have increased by twice as much as the European Union average
Regarding this year, László Balogh emphasized that many buyers can return to the housing market. By the way, this is also discussed at length in the mentioned housing market report of the MNB. The reason for this is that the interest rate environment and government bond investments will no longer be so attractive, so many people are looking for new places for their funds. It must not be forgotten that, in addition to various forms of savings, housing investments will certainly compete for the funds released from possible redemptions due to residential government bond maturities, high Premium Hungarian Government Bond (PMÁP) interest payments, and a significant reduction in PMÁP interest rates. And here we are talking about a significant amount that can also affect the domestic real estate market, since in 2025, around HUF 1,300 billion in interest payments will be made by households after each series of PMÁP, and almost HUF 1,800 billion in residential government bond investments will expire – draws attention in unison .com expert and the MNB. In addition, most of these payments will be due in the first five months of the year, which means that the first half of the year can bring very exciting changes. This can be strengthened by the HUF 150,000 per month housing subsidy for young people, which can be given by the employer, as well as by the decree on the new home renovation subsidy aimed at rural families with children.
It is not yet known what will cause the Airbnb decision
The VI. may have a serious impact on the real estate market. In the district, a vote was held in connection with airbnb, and as a result, a local government decision was made that from January 1, 2026, short-term apartment rentals, i.e., the possibility of airbnb accommodation in the district, will essentially cease. It should be remembered that after the decision, in the periods between August and October, according to ingtalan.com data, the square meter prices of apartments smaller than 50 square meters – classically used by their owners for airbnb publishing – fell by about 5 percent. This can be evaluated as quite an extreme change. At the same time, the number of properties for sale belonging to this segment increased from around 130 to close to 200, i.e. the supply of said properties jumped by 50 percent in just three months. In comparison, the neighboring VII. district, for example, saw a slight price increase during this time. László Balogh pointed out that this was an immediate reaction. However, after the detailed rules were published – which was far from a complete ban on operations – the market corrected. What effects the decision will ultimately have on the market will be revealed several months later, and in 2025-2026 it will be possible to really see that the neighboring V. and VII. compared to the district, what impact will the voting and the decision have on the real estate turnover and prices of the district.
It was a difficult year for the construction industry
Last year, the construction industry performed 1-2 percent below the 2023 level. This means that, at current prices, a construction and installation value of around HUF 8,800 billion can be calculated in 2024 at the sectoral level, according to the end-of-year summary of the National Association of Construction Contractors (ÉVOSZ). Of course, there were huge differences between the entrepreneurs, some did very well and some did not, on average it can be said that the vast majority of the 140,000 businesses in the sector merely stagnated, compared to the previous year they did not, or could only make very little progress.
And the sales revenue of 20 percent of the businesses decreased significantly, the association indicated.
The fact that the economic performance of the sector really did not develop as expected is vividly shown by the fact that by the end of the year, according to ÉVOSZ’s calculations, the number of permanently employed people was 30,000 fewer than the previous year. However, the number of shorter fixed-term employees may have increased depending on employment. Skilled workers and engineers are, however, still permanently employed by the enterprises as a whole. The companies implemented an average wage improvement of 12 percent throughout 2024. In salary tables, employers primarily evaluate knowledge and years spent at the company. László Koji, the president of the organization, summarized the situation of the sector by saying that the construction industry will end a difficult year in 2024.
According to ÉVOSZ, in addition to the aforementioned, the fact that the profitability of the sector decreased in all segments was also a problem. Building material manufacturers, traders, designers, contractors, and engineering service providers are all expecting a decrease in the result relative to sales. The means of improving efficiency in 2024 was primarily the reduction of operating costs. This year’s big challenge is at what prices can you get work in the intensifying competition, what additional efficiency improvement measures can companies take, which in many cases may also require resources. According to László Koji, the number of businesses that have the financial resources to carry out digitization processes, technological developments and meaningful adult training on their own is small. Only the best are capable of this, taking into account that the volume of concluded contracts in 2025 may further decrease. Construction industry activity can only grow if the necessary financing background is settled. This requires loan interest rates of 5 percent or less, the preparation and gradual launch of deferred state and local government investments, and the alleviation of the housing crisis with government programs that last for years.
Source: nepszava.hu
