Budapest

Budapest’s housing crisis in 2025 is characterized by soaring prices, rapidly shrinking affordability, and severe shortages in quality, accessible homes. Median apartment prices have surged by nearly 19% in the past year, reaching up to €3,100 per sqm for resales and €4,300 for new builds, while monthly rents climb annually by more than 9%, averaging €15–€17 per sqm and pushing central one-bedroom units well above €1,000 per month. Meanwhile, construction of new homes has dropped to its lowest rate in recent history, with just a 0.29% annual renewal of the housing stock—the weakest in Europe.

Although the official number of homes exceeds households, over 161,000 units in Budapest are vacant, often because they are substandard or poorly located. The crisis is fueled by persistent investor demand—up to half of new homes are purchased by investors rather than residents—pressuring prices further beyond reach for many first-time buyers and younger people. The private rental sector is dominated by market-rate units, and social or public housing is marginal and shrinking.

Those most affected include young workers, students, low- and moderate-income families, recent graduates, and migrants. Particularly vulnerable are individuals unable to access the scarce, deteriorating supply of subsidized housing and those forced to pay inflated rents or delay forming independent households.

Budapest’s housing market in 2025 is marked by ongoing price growth and severe affordability challenges. Over 80% of Budapest residents own their homes, while approximately 17.5% are renters—a figure much higher than the Hungarian national average, but still reflecting a predominantly owner-occupied landscape. The private rental sector covers 10–12% of the entire housing stock. The share of households living in public or social housing is very low, at around 4%, and these dwellings mostly serve low-income or vulnerable residents. Public housing is not synonymous with social housing in Budapest, as public housing is municipally owned and may be let at sub-market rates, whereas social housing specifically targets those with greatest need and is coupled with social support; however, both sectors are extremely limited and have shrinking, deteriorating stocks.

As of June 2025, the median purchase price for an apartment is about €2,800–€3,100 per sqm for resale, and up to €4,300 per sqm for new builds. Median monthly rental prices are around €15–€17 per sqm. Strong demand, sluggish new supply, and restrictions on short-term rentals are keeping both sale and rental prices elevated. New city initiatives aim to support affordable renting, but public and social sectors remain marginal overall.

Budapest's city administration is tackling the affordable and sustainable housing crisis through several initiatives:

1. AHA Project: Launched in 2024, this project aims to provide quality social rental housing by developing a digital early warning system to prevent eviction and setting up a housing office to assist with housing and energy efficiency issues. The project includes converting disused buildings into modern, energy-efficient homes, with a pilot in Újpest.

2. "Home, for Everyone" Strategy: Introduced in 2022, this strategy focuses on preventing homelessness by providing affordable housing and establishing a dedicated housing agency. The agency collaborates with property owners to rent apartments at below-market rates, handling tenant selection and rental collection, and offers social considerations in tenant selection.

3. Housing Agency Model: This model involves the city collaborating with property owners to use vacant properties for non-profit housing initiatives. It aims to optimize vacant homes and provide rental management services, allowing owners to generate income while supporting affordable housing.

4. Renovation and Repurposing Projects: The city plans to renovate public, low-quality, and energy-inefficient housing stock using EU funds. Additionally, there are plans to repurpose unused municipally owned buildings into public housing units.

Several individuals and organisations in Budapest have publicly committed to tackling the city’s housing crisis and promoting affordable, sustainable housing. Notable voices include Bálint Misetics, Senior Advisor to the Mayor on Housing and Social Policy; Ada Ámon, head of the Budapest Climate Agency; and Mayor Gergely Karácsony, who has repeatedly advocated for expanding the social rental sector and addressing homelessness through large-scale investment and municipal action.

Key collaboration partners in academia include the Periféria Policy and Research Center, which actively researches inclusive housing solutions and vacant property utilisation. In the real estate sector, the platform ingatlan.com and its leading expert László Balogh contribute expertise and market analysis; other large developers and real estate associations have shown interest but often focus more on demand-side solutions.

From the startup sector, partners could include local proptech firms and IT companies involved in the AHA Project consortium, which delivers technical solutions for housing management and social support. In the NGO sector, Habitat for Humanity Hungary, established housing advocacy groups, and organisations like the Periféria Policy and Research Center are already mapping vacant buildings and promoting reuse for affordable housing purposes.

Municipal bodies, including the newly launched Municipal Housing Office staffed by social workers, play a leading coordinating role and facilitate partnerships with diverse stakeholders committed to sustainable, inclusive housing transformation.

Housing cooperatives in Budapest—referred to as “lakásszövetkezet” or housing associations—play a modest but distinct role, mainly in the context of multifamily buildings managed collectively. The primary function of these cooperatives is not so much providing new affordable housing, but maintaining and operating existing dwellings built largely in the late socialist era. Their activities encompass renovation, energy efficiency upgrades, and building management. Most housing cooperatives operate as legal nonprofit entities governed by specific regulation, with their financial resources coming mostly from member contributions used for repair, maintenance, and modernization.

In terms of the sector’s size, cooperative housing represents only a small portion of Budapest’s housing stock—significantly less than social or public housing, with the majority of Budapest residents living in privately owned homes or private rentals. Precise statistics on the share of cooperative housing units in Budapest are not publicly available, but its overall share is estimated to be minor and not a growing segment.

Recent sector developments focus on supporting renovation and sustainability. Local governments regularly provide grant programs and interest-free loans for cooperatives and associations to modernize and retrofit buildings, especially improving energy efficiency. In 2025, city-wide initiatives such as the Budapesti Zöld Panelprogram offer substantial funding and technical support for energy-saving renovations in large housing blocks. These programs are the city’s main mechanism to promote and sustain cooperative housing, with emphasis on environmental improvements rather than expansion of the cooperative sector.