As we approach the final quarter of 2026, it is a good time to reflect on what the Hungarian property market has experienced over the past 12 months, and particularly so far this year.
The market recovered strongly during 2024 before accelerating sharply in 2025. Average Hungarian house prices increased by 12.8% in 2024 and then by 23.5% in 2025, the strongest real increase recorded by the MNB in 25 years.
Conditions have become more selective in 2026. KSH recorded annual price growth of 8.6% in the first quarter, considerably slower than during 2025. By the end of last year, the MNB estimated that prices nationally were around 22.5% above the level suggested by economic fundamentals.
Yet various parts of the market are behaving very differently
I think we are increasingly seeing a two-speed, or even three-speed, Budapest property market.
Budapest panel apartments are a good example. KSH reported that panel prices per square metre were 35% higher year-on-year in the final quarter of 2025. Prices continued upwards into early 2026, but peaked in February. By July, Duna House data showed they had fallen by more than 8% from that peak.
Traditionally built apartments moved in the opposite direction, with average square-metre prices reaching their highest level of 2026 in July. The price gap between the two segments widened from around 11% in spring to almost 21% by July.
This is why an 8% correction in panels needs context. It follows an exceptional rise rather than several years of falling values.
The new-build market is showing another change. Around 22,000 Budapest homes were in projects under development and sale in the first quarter, while the number still available reached a record 9,490. Around 3,300 new apartments were sold during the first half of 2026, 25% fewer than in the previous six months.
With more apartments available and sales slowing, I think this is one part of the market where buyers are beginning to regain some negotiating power.
Transaction numbers have softened too. The MNB estimates that 152,000 homes changed hands in 2025, but transactions fell 18% year-on-year in the first quarter of 2026. Duna House estimated 9,292 transactions in July, only 2.1% below July last year.
To me, that suggests the market has slowed rather than stopped as some commentators seem to suggest.
Meanwhile, financing conditions are beginning to move in the other direction. The MNB has cut its base rate to 5.5%, following three consecutive summer reductions. However, the overall cost indicator for housing loans was still 7.81% in June.
I expect it will take time for lower central-bank rates to feed through fully into mortgage rates. If borrowing costs continue to fall, that should gradually improve buyer confidence and borrowing capacity.
Otthon Start has had a much more immediate impact. By March, banks had signed 33,200 loans worth HUF 1,161 billion under the programme. Subsidised loans accounted for 81% of housing lending in the first quarter, while Budapest's first-home buyer share increased from around 25% to 40%.
That is a significant change in the composition of demand
Investor behaviour has moved the other way. The MNB reports fewer investment purchases following the programme's introduction, while investors have become increasingly prominent among sellers.
I don't think investors are abandoning Budapest. But at today's prices, the numbers have to make sense without assuming another 20% year of capital growth.
Rental conditions remain relatively supportive. Budapest asking rents increased 5% over the year to July. Median gross earnings also reached HUF 617,900 in June, up 8.8% year-on-year.
Rising wages provide some support for rents, although affordability remains an important constraint for buyers after the exceptional property-price growth of the past two years.
Looking ahead, I think the Hungarian property market will remain selective through the final months of 2026.
Some further price adjustment would not surprise me, particularly in segments that rose fastest. But I don't currently see the evidence for a broad or prolonged Budapest downturn. Lower interest rates and Otthon Start should continue to support demand, although affordability will remain important.
For sellers, realistic pricing will matter more. For buyers, greater choice and slower activity may create better negotiating opportunities. For landlords and investors, strong rents remain positive, but purchases increasingly need to deliver realistic rental returns. Exceptional capital growth can no longer be assumed.
Looking further ahead, falling financing costs could bring more buyers back during 2027. I therefore expect the current adjustment to give way gradually to a more stable market, without developing into a prolonged downturn.
2024 was the recovery, 2025 was the acceleration, and 2026 increasingly looks like the adjustment.
As we approach the final quarter, understanding which part of the market you are actually in will be more important than simply following the headline numbers.