6 November 2026
While the Hungarian commercial real estate market has possibly already passed its cyclical low, the recovery may be protracted due to a slow economic upturn and high levels of uncertainty. In 2026 H1, investment turnover increased year-on-year, but it remains at a moderate level, and the share of domestic investors rose again. Geopolitical tensions are adversely impacting the commercial real estate market via higher risk-free euro yields, affecting investment, renting and development. Based on current demand levels and planned new completions, vacancy rates are expected to rise in both the Budapest office and industrial-logistics markets. While there is no evidence of excessive risk-taking in domestic credit institutions’ loan exposure to the commercial real estate sector, the risk associated with their bond holdings increased in 2026 Q2.
The sluggish recovery in economic activity failed to provide any significant support for the commercial real estate market in 2026 H1. Nevertheless, positive trends were seen in some market segments: with the expansion in tourism, performance indicators in the hotel sector improved, while retail sales also continued to rise as the consumer confidence index advanced to a multi-year high. Overall, perceptions of the cyclical position in the commercial real estate market improved in 2026 H1, but based on survey data from recent quarters, market experts’ assessment of the situation still reflects uncertainty.
In the Budapest office market, the vacancy rate fell by 0.3 percentage point to 12.2 percent in 2026 H1, remaining below its long-term average of 13.2 percent. By contrast, the vacancy rate in the industrial-logistics market rose by a substantial 2 percentage points to 14.8 percent, thus significantly exceeding its long-term average of 10.5 percent; this level is also considered high compared to other regional capitals. The increase in this indicator was driven by negative net take-up in the industrial-logistics market in Budapest and its environs in the first half of the year. In the office market, the vacancy rate is expected to rise over the short term due to the low pre-lease rate for offices slated for completion and anticipated relocations following the delivery of state-owned office buildings. This indicator is also expected to keep rising in the industrial-logistics market.
Investment volume in the domestic commercial real estate market amounted to approximately EUR 560 million in 2026 H1, up 50 percent on the same prior-year period. High-value transactions (exceeding EUR 50 million) accounted for a significant portion of the half-yearly volume, with three such deals accounting for 42 percent of the total. The proportion of transaction volume attributable to domestic investors rose again in the first half of the year, advancing to 80 percent from 61 percent in 2025, while the average share of domestic investors across the CEE region was 35 percent. Primary office investment yields typically stagnated in the more mature Western European office markets and in the CEE region. In the one-year period to the end of 2026 Q2, capital values calculated on the basis of prime office yields and rents rose at an average rate of 5.4 percent in the CEE region and 1 percent in Budapest. Persistent geopolitical tensions, rising euro yields and the continued subdued level of investment activity are counteracting the decline in expected yields in the real estate market, preventing any significant improvement in valuations.
Compared to the same period of the previous year, banks disbursed 21 percent more project loans secured by commercial real estate in 2026 H1. The volume of project loans granted increased most significantly in the case of industrial-logistics properties and housing estates. The risk classification of credit institutions’ project loan portfolio backed by commercial real estate did not deteriorate overall, but the risk associated with bond exposures linked to the real estate sector increased in the second quarter. According to the MNB’s Lending Survey, on the whole banks left lending conditions unchanged in the commercial real estate segment in 2026 Q2, although in the case of office buildings a net 11 percent of banks reported tightening. Looking ahead to 2026 H2, 10 percent of banks plan to further tighten project lending standards for office buildings, citing sector-specific risks and overvaluation.
In view of the continuing risks in the commercial real estate market and in line with an earlier decision, the MNB has applied a 1-percent sectoral systemic risk buffer (sSyRB) since 1 January 2026. This helps to promote domestic credit institutions’ resilience in relation to their exposures in the commercial real estate market. These risks are mitigated by the portfolio’s conservative average LTV ratio of around 50 percent, as well as the low proportion of non-performing loans.
The MNB’s Commercial Real Estate Market Report is available at the link below.
https://www.mnb.hu/en/publications/reports/commercial-real-estate-market-report