Year 2024 in the City Center Real Estate Market

The beginning of 2024 saw a slight recovery in the Budapest city center real estate market, which was, in fact, fueled by the traditional boom at the end of 2023.

According to Ben-Ezra Orran, an expert at Central Home, demand has gradually increased compared to previous years, especially for newer two-room apartments. Prices on the market have continued to rise, in many cases exceeding the rate of inflation, particularly in the priority areas of districts V, VI, VII and XIII.

According to the expert, the following main factors have influenced the market over the year:

- Economic uncertainty: the public deficit, high base rates and rising construction costs have challenged real estate market players.

- Weakening of the forint: After strengthening in previous years, a weakening of 7-10% was recorded in 2024, which favored foreign investors.

- Investor activity.

Foreign investors, mainly from Asian countries, remained a key target group for Budapest's city center real estate market. The ‘visiting investor status’ will allow them to obtain a ten-year residence permit for the next period by purchasing property for EUR 500,000, which they will mostly use for luxury, spacious, centrally located properties.

The rental market has also grown, driven by a boom in tourism and increased demand for student accommodation. Rents rose by 5% year-on-year to summer 2024 and demand continued to outstrip supply. Average rents this year have developed as follows.

- Studio apartments: HUF 140,000-160,000/month

- Living room with one bedroom: over HUF 180,000 Ft/month

- Two-bedroom apartments: over HUF 230,000 HUF/month

The market for property for sale was no less uneventful in 2024. In the V. district and the Andrássy Avenue section of the VI. district, property prices were above HUF 2,000,000/m², while in districts VII and VIII and in Újlipótváros (in District XIII), prices fluctuated between HUF 1,200 000 and 1,500,000/m². The market dynamics continued in the second half of the year, with demand for renovated central apartments suitable for AirBnB.

In the city center property market, the level of bargaining varied considerably according to the condition and location of the properties:

- Refurbished, premium apartments: bargaining power is less than 5% and selling time is short.

- Average condition apartments: bargaining power of up to 15% and longer sales times as high renovation costs deter buyers.

"To sum up, we are closing a successful but challenging year," Ben-Ezra Orran said. "In 2024, the Budapest city center real estate market remained attractive for both domestic and foreign investors. The year was characterized by rising prices, increasing demand and a buoyant rental market, while economic uncertainties and tightening regulations posed challenges. The market responded flexibly during the year and, although bargaining remained present, good quality, centrally located apartments remained in short supply. Based on the experience of 2024, the stability and attractiveness of the city center real estate market remains a key determinant of Budapest's economic and real estate market," he added.