Hungarian Real Estate Market: More Positive Outlook

The market expects investor activity in the Hungarian commercial real estate market to increase this year, mainly due to improving investor sentiment, the lowering of the European Central Bank (ECB) base rate and the increasing presence of foreign working capital from Asia, international real estate consultancy Colliers said on Tuesday, according to MTI.

They added that the outlook for this year compared to 2024 is also more positive in terms of investment volumes.

Among the sectors, the office market was analysed first, with the biggest movements in 2024 linked to the relocation of public and government offices, according to Colliers. Contract renewals dominated the transactions, accounting for almost 60 per cent of total leasing volume, while new leases were down by 20% year-on-year.

Total office stock in Budapest increased to 4.456 million sqm, with average vacancy rates reaching 14.1% and speculative vacancy rates reaching 17.5%; the rise in vacancy rates is expected to peak in 2025.

In addition, Colliers says that it is important to note that the office market is experiencing stable demand, as tenants are once again considering retaining or even expanding their space following the rethinking and optimisation of office space.

According to the statement, the total stock of the industrial property market will exceed 5.5 million sqm in 2024, of which 3.7 million sqm will be available in Budapest and 1.8 million sqm in rural areas.

According to current information, a further 587,300 sqm of new industrial property will be on the market by 2026, 43% of which is already pre-let. The vacancy rate in Budapest has fallen to 7.9%, while in rural areas it has risen slightly to 6.8%. All these indicators suggest that the market is performing well, with demand for logistics and industrial property remaining high.