Budapest’s Housing Market is a F*cking Time Bomb – Here’s When It’ll Blow

Alright, listen. I don’t usually post about Hungary. I keep my focus on global finance, trading, and investment plays that aren’t stuck in a tiny insignificant European bubble. But, plot twist—I was digging into something for work, building out a real estate investment model, and suddenly, I had my “holy f*ck” moment. You ever see that scene in Margin Call when the analyst realizes the whole system is about to collapse? Yeah, that was me, except instead of Wall Street, it was Budapest’s real estate market, and instead of billions, it was a clusterf*ck of overpriced shoebox apartments, fake demand, and government-fueled madness.

And since I’ve got a lot of mates back in Budapest, plus a decent number of you reading this blog from my hometown, I figured—why not share my findings? If you’re thinking about buying property in Budapest, strap in, because this ride might just end in a fiery crash.

Let's look at the housing Market in Budapest

Budapest’s real estate market is like a badly rigged casino—if you got in early, you’re swimming in cash. If you’re trying to buy now? Good luck. Prices have been on a wild tear, doubling in the last decade, fueled by foreign investors, Airbnb speculators, and a government injecting free money into the system like a junkie on a bender. The result? Apartments that cost more than most people will earn in a lifetime, locals getting priced out, and a rental market that’s turning into a f*cking nightmare.

If you’re under 35 and don’t have rich parents or a sugar daddy/mommy, or don't activly try to gamble your paychecks on the markets, congrats—you’re never owning property in Budapest. This is playing out just like the U.S. housing crisis, except here, people have worse salaries, sh*ttier infrastructure, and wine instead of whiskey to cope with it. Your boomer parents bought their flats for the price of a BigMac and now have the audacity to tell you to "just stop drinking coffee and save." Meanwhile, a decent 50m² flat costs 80M HUF (~200,000 USD), and even if you gave up every f*cking latte, it’d still take 150 years to save up for a down payment.

But Why is Budapest real estate so expensive?

Alright, let’s break this down properly. Why does an 80M HUF (~200,000 USD) shoebox cost more than most Hungarians will ever earn in a decade? Is the average Budapest resident out here making Wall Street money? Hell no. In fact, wages and real estate prices in this city are living in completely different realities.

Budapest Wages vs. Real Estate: The Math Ain’t Mathing

Let’s start with the basics. How much does the average Budapest resident actually make?

Avg. net salary in Budapest (2025 projection) →

477K HUF/month

Median net salary → 379K HUF/month

(Source: Hungarian Statistical Office)

Median salary means that half of all workers earn less than this amount and half earn more. It’s a better reflection of reality than the average (mean) salary, which gets distorted by high earners at the top. Think of it like this: If Jeff Bezos walks into a bar, the average wealth of everyone inside jumps to a billion dollars, but the median wealth doesn’t change. That’s why the median salary is more accurate for understanding how most people live.

Now, the average salary can be misleading because of two reasons:

1. The grey economy – Hungary has a massive under-the-table cash economy where jobs like personal trainers, waiters, taxi drivers, and handymen make a lot more money than official stats show.

2. High-income earners distort the numbers – A handful of business owners and corporate execs making millions pull the average salary up, making it seem like people are earning more than they really are.

So, when we adjust for the grey economy, the actual take-home pay for a lot of Budapest workers is higher than official statistics suggest—but still nowhere near enough to afford a home.

Avg. net salary in Budapest (adjusted for grey economy): 525K - 570K HUF/month

Median net salary (adjusted for grey economy):

415K - 455K HUF

(Source: theglobaleconomy.com)

So… can the average Hungarian afford to buy a flat?

Short answer? Not a f*cking chance.

A 70M HUF (~175,000 USD) mortgage costs ~580K HUF (~1,450 USD) per month.And we just saw that most people eran around 455K HUF ~1,130 USD). See the problem? Your entire paycheck doesn’t even cover your loan. So unless you’re ready to sell organs on the dark web or start dating a 60-year-old sugar investor, you’re probably stuck renting forever—or worse, living with your parents until you’re 40 like half the damn country.

But if Hungarians are broke, who’s buying?

If the average Budapest resident can barely afford a car loan, then who the hell is buying all these overpriced flats? The answer: foreign investors, rich Hungarians, and Airbnb speculators.

1. Foreign investors

Budapest has insane amounts of foreign money flowing in, because for a lot of outsiders, Hungarian real estate is dirt cheap compared to their home markets. More than 30% of real estat owners in Budapest are not local, the biggest buyers are:

• Israelis – Major players in real estate, buying up entire buildings for long-term investment.

• Germans & Austrians – See Budapest as a “cheaper Prague,” where they can invest and still get solid rental returns.

• Vietnamese & Chinese buyers – Many purchase properties for family migration or passive income.

(Source: interrelo.com)

Budapest is a goldmine for foreign investors because it’s cheap to buy (with euros or dollars) , easy to own, and guaranteed rental income. Hungary’s property taxes are practically non-existent, so once they buy, they barely pay anything to hold onto it. Even if locals can’t afford to buy, they still have to rent, so landlords keep jacking up prices knowing people have no choice. And unlike countries that actually regulate foreign buyers, Hungary just lets them scoop up everything with zero restrictions. No extra taxes, no hoops to jump through—just bring money and you’re a Budapest landlord.

2. Hungarys "f*ck you money" crew

While normal Hungarians are out here choosing between rent and groceries, there’s a tiny top 5% who treat real estate like Pokémon cards. I don't want to get too political in this economic breakdown but if you lived in Budapest in the la12 years you know who am I talking about.

• They buy property as investments, not homes.

• They don’t even need to rent it out—they just park cash in it.

• 100M HUF (~250,000 USD) for them is a rounding error.

And if you’re thinking, “Why don’t they invest in stocks instead?”—buddy, the Hungarian stock market is a f*cking joke. It's like an inbead chile from the Appalachian Mountains. Real estate has been the only reliable way to protect wealth here for decades.

3. The Airbnb takeover

Investors have been capitalizing on Budapest's tourism boom by purchasing properties for short-term rentals, such as Airbnb. This strategy has offered attractive returns, contributing to the city's vibrant tourism sector. However, to address housing affordability concerns, the Hungarian government has introduced new regulations. Starting January 1, 2025, there's a two-year moratorium on new short-term rental registrations in Budapest, halting new Airbnb-style listings until the end of 2026. Additionally, the annual flat-rate tax for existing short-term rentals will increase from 38,400 HUF to 150,000 HUF per room.

(Source: hungarianconservative.com)

These measures aim to balance the interests of property investors with the need for affordable housing for Budapest residents. This is why rents in Budapest are insane. A local earning 455KHUF/month can barely afford a normal apartment, but a German tourist paying in euros? No problem.

The big question: HOW are locals affording to live? (spoiler: most aren’t)

Let’s be real—most people in Budapest aren’t buying sh*t. The whole "work hard, save up, buy a home" dream? Dead. Instead, here’s how the average Hungarian is surviving this overpriced nightmare:

1. Renting – Because when a 50m² flat costs 80M HUF (~200K USD), what the else are you gonna do? Rents are brutal, but at least you don’t have to take on a soul-crushing mortgage.

2. Living with Family – Boomers bought their flats for the price of a chicken nugget, so now their millennial and Gen Z kids are still living with them in their 30s, waiting for either a miracle or an inheritance.

3. Buying Outside Budapest – Some folks escape to the suburbs or small towns where flats don’t require selling a kidney. The trade-off? Long-ass commutes and living in places with no jobs or nightlife.

4. Loans, Inheritance, or Dumb Luck – Unless you’re born into money, or gambled your money on the stock market and won, your only way in is through massive loans that will leave you paying double the price of the flat over 20 years.

   
   

The government’s genius plan: pump the market even more

Instead of actually making housing affordable, the Hungarian government’s idea of a fix is throwing even more money into real estate—which, surprise, just makes things even more expensive. First, we have CSOK, the Family Housing Support Program. This glorified baby making bonus offers up to 10M HUF (~25K USD) in grants and another 10M HUF in cheap loans if you promise to pop out at least three kids and buy property. In theory, it’s meant to help families buy homes. In reality? It just inflates prices even more, because sellers and developers know buyers are walking in with free government money. (Source: abouthungary.com)

Get in mate, we are on our way to pump the housing market!

But wait, there’s more! The latest genius idea? Letting people use their private pension savings to buy property. Starting in 2024, over a million Hungarians will be able to cash out their pension funds (average 2M HUF per person, ~5K USD) to buy, renovate, or pay off mortgages. That means another 300B HUF (~750M USD) getting dumped into real estate, making the market even more expensive. Instead of making homes affordable, the government just keeps funneling every last forint into real estate, pushing prices higher and higher. So we have a lot of forign inverstorrs also a lot of local inverstors, and more and more artificially money gets pumped into the market. Do I have to say it:

‼️ IT'S A FU*CKING BUBBLE ‼️

Can real estate really keep climbing 10% every year?

Short answer? HELL NO. But thanks to the pension fund money bomb in 2025, we might see another 10-20% spike before this sh*t finally slows down. After that? A slow crawl upward until the inevitable crash.

For now, the market still has a bit of juice left thanks to:

• Foreign investors still throwing cash at Budapest like it’s a fire sale.

• Airbnb still pulling in tourist money, even with new regulations.

• The government literally pumping pensions and family loans into real estate.

But here’s the problem—at some point, locals simply won’t be able to afford to rent or buy anymore. And when that happens, things get real ugly. The cracks are already showing, and a major correction is coming when

What’s the play here?

If you already own property, you’re sitting pretty (for now). If you don’t own yet, jumping in right now with a fat mortgage is NOT the smartest move. Biggest takeaway? This market is on borrowed time. If you’re gonna play this game, be smart, be liquid, and be ready for the moment the house of cards collapses.