In 2025 H1, several macroeconomic indicators determining demand in the housing market developed favourably in terms of market activity: the number of persons employed in the national economy remained at a high level, and households’ purchasing power was supported by the continued rise in real wages and the increase in net financial wealth as a percentage of GDP as well. Housing market demand was also boosted in the first half of the year by savings inflows from the government securities market.
Demand for residential properties for sale grew by 5 per cent year-on-year in 2025 H1, but as a result of the Home Start Programme, it had already increased by 46 per cent in August 2025, prior to the launch of the Programme in September. This was followed by a dynamic, 37-per cent year-on-year increase in completed transactions in September. In Budapest, 81 per cent of transactions completed in the third quarter met the price limits of the Home Start Programme, while virtually all of the properties sold in rural areas did so. In 2025 Q3, in contrast to previous quarters, investors were present in greater numbers on the supply side of the market, partly due to the continuing decline in rental yields. Buyers’ bargaining power fell due to increased demand. The median difference between the transaction price and the last advertised price was -1.5 per cent in Budapest and -3.7 per cent in rural areas in 2025 Q3.
In 2025 Q2, housing prices rose by 17.9 per cent year-on-year on average at the national level, making Hungary the country with the highest nominal housing price growth in the European Union. Based on preliminary data, the annual growth rate of housing prices continued to accelerate, reaching 23.9 per cent nationally and 29.9 per cent in Budapest in 2025 Q3. In 2025 Q2, we estimate that housing prices exceeded the level justified by fundamentals by 18.8 per cent nationwide, representing a 5.7-percentage point increase within one year. Most of the overvaluation sub-indicators, such as the rise in housing prices relative to incomes, construction costs, rents and affordable contract sizes, also point to an increase in risks.
In 2025 H1, banks concluded housing loan contracts worth HUF 808 billion, which was 26 per cent higher than in the same period of the previous year, while the share of home purchases financed by loans reached nearly 40 per cent, up 5 percentage points from the end of 2024. The announcement in July of the launch of the Home Start Programme in September 2025 caused a temporary ‘wait-and-see’ period in the housing loan market at the end of the summer. In 2025 H1, the number of housing loan contracts increased by only 8 per cent year-on-year. The increase in the volume of new disbursements was mainly due to rising loan amounts in parallel with rising contract sizes. According to the Lending Survey, banks did not change their housing loan terms overall in 2025 Q3, but 24 per cent of them may ease their loan-to-value ratio in the next six months due to increasing competition. Banks saw a surge in demand for housing loans in the third quarter and expect this to continue in the future, due to the Home Start Programme. From September, those who are not eligible for family subsidies but take out a loan under the Home Start Programme will see a significant improvement in the affordability of house purchases. However, without a substantial and rapid adjustment in housing supply, rising demand will result in further increases in housing prices.
In 2025 Q1–Q3, 7,500 new residential properties were issued occupancy permits in Hungary, which is 14 per cent less than in the same period of the previous year. In 2025 Q2, however, the number of building permits issued nationally jumped to a 2.5-year high, particularly in Budapest, possibly owing to developers bringing forward the licensing of certain projects in anticipation of stricter building regulations coming into force in July 2025. In response to the upturn in demand observed in the new-build housing market since the end of 2024, the number of condominium construction projects started in 2025 H1 more than doubled nationwide and more than tripled in Budapest compared to the same period of the previous year. This was also reflected in the increase in demand for housing project loans perceived by banks, which is likely to continue in the future.
The average price per square metre of new homes in Budapest rose to HUF 1.77 million by 2025 Q3, representing 15-per-cent annual price growth. In the third quarter, price reductions accounted for a larger proportion within re-priced available dwellings, only a small part of which was related to adjustments to the Home Start price caps. In the third quarter, 17 per cent of new homes for sale in Budapest met the Home Start conditions, while this figure was 29 per cent for homes newly coming onto the market during this period.