Hungary needs more homes. But one of the earliest indicators of what will actually be built in the years ahead has just moved sharply in the wrong direction.
According to KSH data, building permits and simple notifications were issued for 1,512 planned homes in August, down almost 29% from July and 18% from a year earlier.
It was the lowest monthly figure since January 2025, breaking the stronger trend seen during the first half of this year. In the first six months, 16,588 homes were approved or notified, 29% more than a year earlier.
Large Projects Are Taking the Hit
The number of planned residential buildings was 828 in August, slightly higher than the 813 recorded a year earlier. Planned single-home buildings increased from 601 to 654.
Yet the total number of planned homes fell from 1,835 to 1,512.
That indicates the weakness is concentrated in larger residential projects rather than individual house building.
The difference matters.
A private house can often be built in around six to nine months. A large apartment development can take two to five years, sometimes longer, involving substantially more capital, complex engineering, multiple contractors and trades and far greater exposure to changes in costs, financing and buyer demand.
The Numbers Have to Stack Up
Builders are facing what amounts to a perfect storm: higher and unpredictable costs, thin margins, shortages of skilled tradespeople and greater market uncertainty.
For builders locked into fixed-price contracts, unexpected cost increases can have to be absorbed rather than passed on. At the same time, weaker property prices and cautious buyers can make proposed developments less financially viable.
“For a developer, the numbers ultimately have to work,” says Alex Markus, Chief Executive, City-Lets Ltd.
“If construction and labour costs keep increasing but buyers become more cautious about what they will pay, eventually some projects simply stop making financial sense.”
This is particularly relevant in Budapest.
In central Budapest, many new developments now start around HUF 2 million per square metre and can reach HUF 3–4 million at the premium end. City-Lets estimates buyers increasingly need at least HUF 120 million to afford much of the new-build stock being offered in central locations.
Developers need sufficiently high selling prices to make projects viable. But those same prices reduce the number of buyers who can afford them.
Uncertainty Has Added Another Problem
August also brought the suspension for review of certain highlighted housing projects connected with Otthon Start.
Projects that already had final building permits were not directly stopped. But developments without them face uncertainty while the review takes place.
According to an ingatlan.com estimate reported by 24.hu, highlighted projects across Budapest, major regional cities and their agglomerations involve plans for more than 10,000 homes, including developments containing hundreds of apartments.
Today's Decisions Become Tomorrow's Supply
One weak month does not establish a trend. But after the stronger first half of 2026, August is a warning worth watching.
“Large apartment developments cannot simply be switched on when the market suddenly needs more homes,” says Markus.
If the decline in major projects continues, today's slowdown could leave Hungary with fewer new apartments and less buyer choice several years from now.