Hungary Plans to Restrict Foreign Real Estate Buyers: New Market Regulations in 2025

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Hungary is preparing to limit the participation of foreign nationals in real estate transactions in order to protect local residents from soaring housing prices. As reported by Daily News Hungary, the proposed measures include delegating new powers to municipalities, expanding the right of first refusal for Hungarian citizens, and introducing residency requirements.

Local Municipalities to Gain Control

A key component of the reform is granting local authorities the power to restrict real estate deals if the buyer is not a resident of the municipality. These measures are especially relevant for small towns and villages experiencing demographic and cultural shifts, where an influx of outsiders is driving up housing costs and reducing affordability.

There are no clear guidelines yet on which municipalities will have the authority to implement the changes, but regions under pressure from rising demand — including the Balaton area and the suburbs of Budapest — are actively discussing the proposed regulations.

Previously, the government removed real estate purchases from the "Guest Investor" golden visa program. Foreigners were able to obtain a 10-year residence permit by investing at least €500,000 in Hungarian property. The reform was aimed at reducing external influence on the domestic housing market.

Discus Holdings Managing Director Laszlo Kiss called the move logical amid a heated market: “High prices are already limiting local access to housing, creating social and economic distortions.” Armand Arton, President of Arton Capital, added that investing via regulated funds provides greater transparency and predictability than direct purchases — “making them more acceptable in the current environment.”

Rising Prices and Limited Supply

New real estate controls come amid a sharp increase in demand. According to economist Laszlo Balogh from Ingatlan.com, housing prices in Hungary rose significantly in early 2025. In February, the average price in Budapest reached €250,000, up 17% year-on-year and 4.4% from January. Regional growth ranged from 4.8% to 11.2%.

The average price per square meter in the capital reached 1.24 million forints (€3,100). In outer districts (X, XV–XXIII), prices range from €1,917 to €2,437 per square meter. The cheapest apartments are found in districts XX and XXIII (approx. €138,000), while districts XXI and X range from €143,000 to €146,000.

Outside of Budapest, most listings are in Pécs, Debrecen, and Szeged, where prices per square meter range from €1,739 to €1,839.

Domestic Incentives Driving Demand

Experts note that real estate in large cities may rise by an additional 10–15% due to multiple drivers: the CSOK subsidy program, employer tax incentives, and youth-targeted mortgage benefits. The government has also allowed the use of retirement savings for home purchases without taxation, adding further pressure to the market.

Protecting Locals, Limiting Speculation

The new restrictions aim to stabilize the housing market and protect Hungarian residents, especially in high-demand areas. Local authorities will receive tools to respond quickly to market shifts and prevent speculation. However, the regulatory tightening may reduce investment attractiveness — a trend in line with policies in many other EU countries, where restrictions on foreign buyers are also increasing.