The subdued economic activity in 2025 did not provide meaningful support to the commercial real estate market, but favourable developments were observed in certain market segments. Thanks to the expansion of tourism, performance indicators in the hotel sector improved, and retail sales also continued to grow as the consumer confidence index advanced to a two-year high. Overall, the cyclical position of the commercial real estate market was assessed more favourably in 2025, but market sentiment continued to reflect uncertainty about the outlook.
In the Budapest office market, the vacancy rate dropped by 1.6 percentage points to 12.5 percent in 2025, once again falling below its long-term average of 13.3 percent, while it rose significantly in the industrial-logistics market, increasing by 4.9 percentage points to 12.8 percent. Due to this increase, the industrial-logistics vacancy rate in Budapest exceeded the long-term average of 10.4 percent, which is also considered high in comparison to other regional capitals. The rise in this indicator was driven by the high volume of new completions in the industrial-logistics market in Budapest and its environs, as well as by the low level of net take-up in recent years. Overall, together with the planned volume of new completions and expected relocations, the demand levels observed in recent quarters point to a further increase in vacancy rates in both the office and the industrial-logistics markets, as a result of which the office market indicator may rise above its long-term average again in 2026.
Investment volume in the domestic commercial real estate market amounted to approximately EUR 900 million in 2025, exceeding the low base of the previous year by 123 percent. High-value transactions (exceeding EUR 50 million) accounted for a significant portion of the annual volume, with four such deals representing 43 percent of the total volume. The share of transaction volume attributable to domestic investors declined in 2025, dropping to 61 percent from 73 percent in 2024, which leaves the market more balanced. In more mature Western European office markets as well as in the countries of the CEE region, prime office investment yields generally stagnated, further supporting the stabilisation of property values. In 2025, capital values calculated on the basis of prime office yields and rents rose at a rate of 5.5 percent on average in the CEE region and 2 percent in Budapest. Mounting geopolitical tensions pose risks to project implementation, due to unexpected increases in construction costs, while also raise expected real estate investment yields.
Compared to the same prior-year period, banks disbursed 54 percent more CRE-backed project loans in 2025, with nearly two-thirds of this related to construction loans. The volume of project loans originated increased year on year in all commercial real estate segments, aside from industrial-logistics and other real estate. In the retail, office and hotel segments, which saw substantial increases in annual disbursements, the refinancing of a few large outstanding loan exposures played a significant role; consequently, despite a disbursement ratio of 34 percent relative to the stock, the exchange rate-adjusted outstanding volume only rose by 7 percent. Overall, it can be stated that credit institutions’ CRE-backed project loans predominantly serve to finance properties in Budapest and its environs, and no significant shift towards rural regions has been observed in recent years. According to the MNB’s Lending Survey, banks left lending conditions unchanged overall in the commercial real estate segment in 2025 Q4, but in the case of office buildings a net 11 percent of banks reported tightening. Looking ahead to 2026 H1, 26 percent of banks indicated that they may continue to tighten project loan standards in the case of office buildings, citing a change in risk tolerance.
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. Risks are also mitigated by the portfolio’s conservative average LTV ratio, the favourable geographical distribution of exposures in terms of market demand, and the low NPL ratio.