Where Is the Bottom?
When Could Budapest Apartments Become Truly Attractive Investments Again?
The Budapest residential property market has changed noticeably over the past period.
The momentum of the earlier rapid price growth has slowed, buyer demand has become more restrained, and genuine room for negotiation is appearing in an increasing number of transactions. Investor activity has also declined.
According to the National Bank of Hungary's May 2026 Housing Market Report, investment-purpose purchases have become less prominent since the launch of the Otthon Start Programme, while investors have increasingly appeared on the selling side of the market. The central bank links this more cautious investor behaviour, among other factors, to lower rental yields and increasing overvaluation. By the end of 2025, the MNB estimated that residential property prices nationwide were 22.5 per cent above the level justified by fundamentals.
This raises a simple question:
Where is the bottom?
And for an investor, perhaps an even more important one:
When does it make sense to start buying again?
We Will Probably Only Recognise the Bottom in Hindsight
A market bottom is relatively easy to identify — afterwards.
Once prices begin rising again, demand returns, attractive properties sell more quickly and sellers become less willing to negotiate, it becomes much easier to look back and identify where the turning point may have been.
But by then, we are no longer buying in the same market.
For an investor, therefore, the most important question may not be:
“Have Budapest apartment prices already reached the bottom?”
A more useful question may be:
“Can we already find properties that represent attractive investments at today's prices?”
Those are not the same question.
Why Have Investors Stepped Back?
One explanation is rental yield.
If property prices rise faster than rents, the same rental income produces a lower return on the capital invested. Naturally, this makes residential property less attractive as an investment.
According to the MNB, this has already been reflected in investor behaviour.
In Budapest, however, we believe it would be a mistake to judge an apartment investment solely on the basis of rental yield.
The Budapest investment story has historically been more complex than that.
For many investors, capital appreciation and further appreciation potential have been at least as important as rental income — and in certain periods perhaps more important.
Rental income may provide returns during the holding period, while a substantial part of the overall investment result may come from the increase in the value of the property itself.
A property investment should therefore be evaluated by considering together:
the entry price, rental income, appreciation potential and the level of risk assumed.
Entry Price Matters
In a rapidly rising market, a mediocre purchasing decision can easily be disguised.
If almost every property is appreciating quickly, even paying too much at the time of purchase may appear less significant several years later.
In a stagnant or slower-growing market, however, the quality of the purchase itself becomes much more important.
What is the seller asking?
What is the property actually worth?
At what price can it realistically be acquired?
What alternatives could be purchased with the same amount of capital?
How much appreciation potential still remains?
And perhaps most importantly:
how much of the property's future value are we already paying to the seller today?
This is one reason why the current market is becoming more interesting.
Not because Budapest has suddenly become cheap.
It has not.
But because weaker demand is changing the buyer's negotiating position. Buyer activity in Budapest during the summer of 2026 was significantly below the unusually strong period a year earlier, which had been boosted by the announcement of the Otthon Start Programme, while greater supply may also strengthen buyers' negotiating position.
Negotiation Is Part of the Entry Price
This is particularly important for an investor.
Market statistics show how average or median prices change across a city, district or property category.
An investor, however, does not buy Budapest's average price per square metre.
An investor buys a specific apartment.
Suppose a property is advertised at HUF 100 million but can currently be purchased for HUF 94 million.
Six months later, the overall market price level may be virtually unchanged. But if demand has strengthened and the same apartment can then only be acquired for HUF 99 million, the market statistics may show very little movement.
For the individual buyer, however, the entry opportunity has become HUF 5 million more expensive.
This is why the market bottom does not necessarily correspond to the lowest point of a price index.
For an investor, the price that can actually be negotiated is at least as important as the general market price level.
Not Every Budapest Apartment Will Necessarily Reach Its Bottom at the Same Time
Budapest should not be treated as one single investment market.
There can be significant differences between districts, between streets and even between nearby buildings.
The same is true of different apartment types.
Demand for a well-proportioned, easily rentable apartment in an excellent micro-location may behave very differently from demand for a poorly laid-out or weakly positioned property.
These differences become even more important in a slower market.
When almost everything is rising, the market hides many mistakes.
When the market becomes more selective, the quality of the individual property selection can become a much larger part of the investment result.
What About Apartments That Need Renovation?
This is where the current situation becomes particularly interesting.
An investor does not necessarily have only two options: buy a finished apartment and wait for appreciation, or not buy at all.
There is a third possibility:
buy a property where untapped value already exists at the time of purchase.
However, an apartment requiring renovation is not automatically a good investment.
The question is whether there is sufficient margin between the purchase price, the total renovation cost and the expected market value after renovation.
If HUF 20 million is spent on a renovation and the market value of the property increases by roughly HUF 20 million, we have created a better and more attractive apartment, but we have not necessarily created additional investment value.
The real opportunity appears when the value created exceeds the total cost of creating it.
And the relevant cost is not just construction.
It may also include acquisition costs, design and furnishing, the time during which the property cannot generate income, financing, and — if the property is later sold — selling costs and taxation.
Where Can Value Actually Be Created?
Not necessarily in the apartment in the worst condition.
A badly maintained apartment can still be a poor investment if the seller is already pricing in a large proportion of the post-renovation value.
More interesting opportunities may include:
a property in a strong location but poor condition;
an outdated apartment in a good condominium;
a well-sized apartment with an inefficient layout;
a good property that has been badly presented;
or a sales situation in which a fast and reliable transaction is more important to the seller than achieving the theoretical maximum price.
The opportunity therefore often does not begin with the renovation itself.
It begins with selecting the right property and achieving the right purchase price.
It Is Worth Thinking About Three Different Types of Appreciation
When considering the future value of an investment apartment, it is useful to distinguish between at least three different sources.
1. Market Appreciation
The general price level in Budapest, a particular neighbourhood or a particular property category rises.
In this case, the value of the apartment largely moves with the broader market.
2. Relative Appreciation
A particular micro-location, building type or apartment category appreciates relative to other parts of the market.
Here, what we bought and where we bought it becomes much more important.
3. Created Value
We increase the value of the property ourselves through the purchase price, renovation, a better layout, technical improvements or better positioning.
This is particularly interesting because it does not depend solely on the future movement of the overall Budapest property market.
In a slower market, this can become an increasingly important part of an investment strategy.
So, Is Now the Time to Buy?
There is no universal yes or no answer.
Current data indicate that the Budapest market has become calmer, while demand has also weakened in the new-build segment. According to third-quarter 2026 data from Eltinga and ECRS, demand for new apartments in Budapest fell by close to 40 per cent during the summer months, and among the developers surveyed, price reductions had become more common than price increases.
This does not prove that Budapest has reached the bottom.
Nor do we need that certainty in order to identify a good investment.
For an investor, the more useful question is:
Is there a property available today where the entry price, rental income, appreciation potential, additional value that may be created and the level of risk together already make the investment attractive?
If not, it may make sense to wait.
If there is, however, it may not make sense to wait for the entire market to officially turn.
What Happens When Investors Return?
This may be one of the most interesting questions in the current market.
The return of investors would create additional demand.
Competition could increase again for apartments with strong investment characteristics. Sellers could regain negotiating power, the time required to sell attractive properties could shorten, and exactly the type of opportunities investors are looking for today could become more difficult to acquire.
This creates an interesting contradiction:
if we wait until it becomes obvious to everyone that buying property is attractive again, we may already be purchasing in a less favourable market for buyers.
This does not mean that everyone should buy now.
It means that now may be the time to start paying closer attention.
You Do Not Need to Buy Budapest. You Need to Buy a Good Apartment.
Macroeconomic data matter.
Price indices matter.
Rents, interest rates, transaction volumes and investor activity all matter.
But ultimately, the Budapest residential property price index will not appear on our title deed.
A specific apartment will.
On a specific street.
In a specific condominium.
With a specific floor plan.
At a specific purchase price.
This is why, even if we cannot yet say that Budapest as a whole has reached the bottom, individual properties may already offer attractive entry opportunities.
At Budapest Buyer's Agent, we therefore do not begin an investment property search by declaring that “now is the time to buy” or that “now is the time to wait”.
We examine whether, given the buyer's objectives, investment horizon and circumstances, there are properties available in the current market that represent an appropriate investment decision.
We will probably only recognise the bottom of the market with certainty later.
A good purchase needs to be recognised before that.
Frequently Asked Questions
Has the Budapest property market already reached the bottom?
It is not currently possible to say this with certainty. Market turning points can usually only be identified clearly in hindsight. For an investor, it may therefore be more useful to assess whether a specific property represents an attractive investment at its current acquisition price.
Why has investor activity declined in the Budapest property market?
According to the National Bank of Hungary, investment-purpose purchases have become less common since the introduction of the Otthon Start Programme, with lower rental yields and increasing overvaluation among the factors influencing investor behaviour.
Should rental yield be the only consideration when buying an investment apartment?
No. Rental income is important, but in a Budapest apartment investment the appreciation potential, entry price, potential additional value creation, investment horizon and risk together determine the attractiveness of the investment.
Can renovation still create value in Budapest?
Yes, but not every renovation creates investment value. The relevant question is whether the increase in market value after renovation exceeds the full cost of the renovation and all related expenses.
Should investors wait until other investors return to the market?
Not necessarily. A significant return of investor demand could increase competition for properties with strong investment characteristics and weaken buyers' negotiating position. The decision should therefore be based on the characteristics of the individual investment rather than solely on whether investor activity has broadly returned.
What types of apartments may be interesting in a slower market?
Properties may be particularly interesting where a strong location, efficient layout or durable long-term demand is combined with an attractive entry price, or where renovation or another intervention can create additional value.
Market Sources
The current market observations in this article are primarily based on the National Bank of Hungary's May 2026 Housing Market Report and summer–autumn 2026 data from Eltinga/ECRS and other market participants.
National Bank of Hungary – Housing Market Report, May 2026:
https://www.mnb.hu/kiadvanyok/jelentesek/lakaspiaci-jelentes/lakaspiaci-jelentes-2026-majus
Portfolio – Budapest new-build residential market, 2026 Q3:
Portfolio – Budapest demand trends, September 2026: