2025 was one of the strongest years the Budapest housing market has seen. According to the central bank (MNB), prices in the capital rose 26% year on year in the fourth quarter, and nationally, real price growth was the largest in 25 years. Much of the momentum came from the Otthon Start scheme, which from September 2025 offered first-time buyers a mortgage fixed at 3%.
By autumn 2026 the picture is more nuanced. Price growth in Budapest has slowed to a third of last year's pace, supply is growing, the central bank has cut its base rate, and the government has announced changes to Otthon Start. This article builds the picture from the latest data published up to early October, with sources.
Prices: a slowdown, not a reversal
According to the ingatlan.com house price index, annual price growth in Budapest was 6.7% in August 2026, against 21.5% a year earlier. Month on month, prices dipped slightly in several months of the year: by 0.5% in February and by 0.1% in April and August. That is not a fall, but a pause after a very fast climb.
The central bank's figures tell the same story: annual price growth in Budapest slowed from 26% in the fourth quarter of 2025 to 16.5% in the first quarter of 2026. According to Otthon Centrum's first-half 2026 transaction data, brick-built flats in Budapest averaged HUF 1.482 million per m² (+11.3%) and panel flats HUF 1.181 million per m² (+9.6%, compared with 35% a year earlier).
According to ingatlan.com's chief economist, one reason for the slowdown is that Otthon Start's price cap of HUF 1.5 million per m² has "anchored" Budapest prices since autumn 2025: the average price per m² of resale flats in Budapest sits right at that level. Outside the capital, where prices are further below the cap, growth has stayed faster.
District differences
The city average hides a wide spread. According to ingatlan.com asking-price data from early September 2026, Districts I, II, V and XII formed the most expensive group, with medians between HUF 1.77 and 2.03 million per m². District XI stood at HUF 1.64 million and District XIII at 1.62 million, while at the other end District XVIII was at HUF 1.05 million and District XXIII at HUF 949,000.
The direction differs too. Otthon Centrum's first-half data show Buda family house prices essentially unchanged over the year, against an average rise of 22% in the Pest districts. For brick-built flats, Districts III, XVIII and XIX saw rises of more than 30%, while Districts I, V and XIII were flat. In short: where prices sit below the Otthon Start cap, growth continues; in the pricier districts it has stopped. See our Budapest districts guide for the detail.
Demand and transactions
According to the MNB, 152,000 homes changed hands nationally in 2025, 3% more than the year before. In the first quarter of 2026, however, transactions in Budapest were 29% down on a year earlier, and the Central Statistical Office (KSH) counted 28,569 sales nationally in the second quarter, 6.6% fewer than in the same period of 2025. ingatlan.com expects 130,000–140,000 sales in 2026, and similar volumes in 2027.
The buyer mix has changed too. Duna House's May 2026 barometer shows first-time buyers rising to 36% and investors falling to 30%, so the two main buyer motivations have swapped places since Otthon Start launched. According to the MNB, the share of first-time buyers in the capital rose from 25% to 40% in a year, and in March 2026, 64% of home purchases involved a mortgage.
Supply: more new builds, more resale listings
On the supply side, 2026 is a year of expansion. MNB data show that in the first quarter of 2026, 22,000 new-build homes in Budapest were under development or on sale (46% more than a year earlier), of which 9,500 were still unsold (+63%). Building permits in the capital rose 56% in 2025. According to KSH, 1,269 homes were completed in Budapest in the second quarter of 2026 (+29.8%), while new permits fell 11.8%.
The resale market offers more choice as well: ingatlan.com counted 53% more condominium flats for sale in Budapest in January 2026 than a year earlier.
The 5% VAT rate on new homes ends on 1 January 2027, rising to 27%. Homes in projects with a final building permit by the end of 2026, however, can still be sold at 5% until the end of 2030. Developers are therefore racing to secure permits now. According to the financial press, the VAT increase is likely to feed into prices gradually, over one to three years.
In late August 2026 the government decided to prepare the Wekerle Sándor housing programme, intended to speed up the construction of affordable homes, rental housing and student accommodation. Details have not yet been published.
Interest rates and financing
The central bank's base rate stood at 6.5% at the start of 2026, was cut to 6.25% in February, reached 5.50% in August at the end of a summer cutting cycle, and stayed there in September. The best market mortgage APRs with a 10-year fixed period ranged from 6.19% to 6.89% in Bankmonitor's September comparison.
Borrowing rules have tightened at the same time: from January 2026, the income threshold for the higher debt-service band rose from HUF 600,000 to HUF 800,000. Otthon Start will remain but, according to the government's announcement at the end of September 2026, become more targeted, with investment-driven use filtered out. The specific conditions had not been published by early October. We summarise the details in our article on financing.
The rental market
According to the KSH–ingatlan.com rent index, Budapest rents in July 2026 were 5.5% higher than a year earlier, and the median monthly rent in early August was HUF 260,000. Since the short-term rental ban in District VI, the number of long-let flats in the district has grown, and no new short-term accommodation can be registered in Budapest until the end of 2026. Several districts are preparing their own rules. We cover this in detail in our article on letting.
What will shape the coming months?
We are not publishing a forecast, because several of the key factors depend on political decisions. We can, however, show which variables will set the direction:
| Factor | If it plays out like this | Likely effect on the Budapest market |
|---|---|---|
| New Otthon Start conditions | Stricter eligibility, lower caps | Weaker demand in the below-cap segment |
| New Otthon Start conditions | Largely unchanged | Current slow growth continues |
| Interest rates | Further base rate cuts, cheaper market loans | Stronger demand in the above-cap segment |
| New-build supply | The 9,500 unsold homes are absorbed slowly | More room to negotiate with developers |
| VAT from 2027 | The 27% rate feeds through gradually | Pricier new builds, more demand for resale flats |
| Short-term letting | More district bans from 2027 | More long-term rentals, less investor demand in the inner districts |
What does this mean for you?
If you are buying: autumn 2026 is a more balanced market than a year ago. There is more choice, room to negotiate at the upper end, and no need to decide within days. If you are counting on Otthon Start, watch the timing of the rule change.
If you are selling: realistic pricing matters more than before. Overpriced flats sit for months, while well-prepared flats listed at market price still sell quickly. Our selling guide explains how.
If you are investing: a model built on short-term letting carries regulatory risk in Budapest, while the long-term rental market is strong. In new builds, the 2027 VAT change and the growing stock of unsold homes are reasons to negotiate.
We follow the sources above (MNB, KSH, ingatlan.com, Otthon Centrum, Duna House) closely, and for any specific flat we always start from recent sales in the immediate area. If you would like the numbers translated into your own situation, write to us or visit our Budapest page.
Frequently asked questions
Are Budapest house prices falling in 2026?
The data show prices rising more slowly rather than falling. Annual growth was 6.7% in August 2026 according to ingatlan.com, with small monthly dips in some months. In the pricier Buda segment, prices have essentially stalled.
Should I wait for prices to drop?
If you have found the right flat and your financing is in place, waiting is more of a risk than an advantage. The data show no sign of a general price fall, and rate cuts may strengthen demand.
What will happen to Otthon Start?
At the end of September 2026 the government said the scheme will stay but become more targeted. The specific conditions had not been published by early October. If you are relying on this loan, prepare your application as early as possible.
Will new builds get more expensive from 2027?
VAT on new homes rises from 5% to 27% in 2027, but projects with a final building permit by the end of 2026 can still sell at 5% until the end of 2030. The effect is therefore likely to appear gradually.
Looking to buy or sell in Budapest?
In a 30-minute call we go through what you are looking for, your budget and which districts make sense. In English or Hungarian, with no obligation.
Book a call
Urbán Réka founded Monvero. She works with buyers and investors in Budapest, Dubai and on the Costa del Sol, from setting the budget to signing. This article is for general information; for advice on your own situation, get in touch.
