Real estate: Rising Russian and Vietnamese investment fuels Hungary’s property boom

In 2023, Hungary’s real estate market experienced impressive growth across all sectors. Sales in second-hand housing surged by over 30%, while new-build homes saw even more substantial growth, with an increase of over 50%.

Budapest emerged as a particularly hot spot, recording a 55% rise in sales in the first half of the year, followed by a 38% increase in the latter half. According to Index, experts anticipate this momentum to continue, especially in the capital. Although younger buyers (under 35) are moderately represented in the overall market, they are making a significant impact in smaller towns and villages, where housing costs are lower.

Rural regions have become increasingly attractive to younger buyers, thanks to family home-building discounts and other support programmes aimed at promoting homeownership in these areas. Looking ahead, additional economic incentives could enhance young people’s presence in the market, potentially reshaping demographic trends in Hungarian real estate.

Foreign investors in the market

Despite a decline in foreign property purchases in 2022, international interest remains robust, particularly around Lake Balaton and in Budapest’s central districts. German, Russian, Chinese, Vietnamese, and Israeli buyers are leading the way, drawn to these areas for second homes or holiday properties. In Budapest’s inner city, foreign buyers accounted for 25% of all transactions, while the Lake Balaton area also saw sustained demand from international purchasers.

Foreign buyers represented approximately 9% of all real estate transactions in Budapest, contributing 12% to the overall market value. According to Economx.hu, demand is especially high in central neighbourhoods of Pest, where foreign transactions make up 22% of sales volume and 28% of market value. Around Lake Balaton, in the scenic Somogy and Zala counties, about 15% of properties were sold to foreign buyers, predominantly from Germany, Austria, and Belgium, seeking holiday homes.