Hungary’s commercial real estate market recorded its strongest first-half performance since 2021, as investment volumes rose to €610mn and the country returned to third place among Central and Eastern Europe’s largest markets, mfor.hu wrote on August 14.

The figure represents a 26.7% increase from the first half of 2025, according to international property adviser Colliers. Based on transactions currently in progress, full-year investment in Hungary could exceed €1.2bn.

The recovery comes after several difficult years for the property sector, marked by high interest rates, elevated inflation, weaker economic growth and uncertainty over Hungary’s relations with the European Union. Colliers said that lower political uncertainty, a reduction in country risk and improving financing conditions could support a gradual revival over the next 12 to 24 months.

Hungary accounted for €600mn of the €5.8bn invested in commercial property across the six CEE markets monitored by Colliers in H1 2026. Poland led the region with €3bn, followed by Czechia with €1.4bn.

The regional recovery remains selective, however. Investors are focusing primarily on properties with stable income and long-term competitiveness rather than pursuing broad-based exposure to the market.

Domestic investors accounted for 74% of Hungary’s transaction volume in the first half, suggesting that international capital has not yet returned in large volumes. The office sector was the largest segment, representing 37.9% of investment, followed by retail at 32.9% and industrial and logistics property at 18.5%.

Budapest’s office market showed signs of stabilisation, although developers remain cautious. No new office building was delivered in the capital during the second quarter, according to the Budapest Office Market Consultative Forum (BIEF).

The modern office stock stood at 4.47mn sqm, up 1.1% year on year. The average vacancy rate was 12.2%, while vacancy in speculative developments was higher at 15.7%. Total leasing activity reached 215,042 sqm in H1, a marginal 1% increase from a year earlier.

Market activity continues to be driven mainly by relocations and consolidation rather than rapid expansion. New development is expected to remain limited in the near term, with a more active construction pipeline potentially emerging from 2028.

The industrial and logistics market expanded modestly, reaching 4.18mn sqm in Budapest and 2.33mn sqm outside the capital.

Vacancy rates increased to 14.8% in Budapest and 10.5% in regional markets, up from 12.8% and 8.6%, respectively, a year earlier. Retail property fundamentals benefited from the stronger forint, inflation falling to 1.8% and real wages rising by 12.6% in the first half of the year, according to the Colliers assessment.

Budapest’s modern shopping-centre stock remained broadly stable at around 784,000 sqm. New supply is limited, with the main planned project being Duna Mall, which is scheduled to replace Duna Plaza in 2029.

Colliers said the next phase of the market’s recovery would depend on a more predictable regulatory environment, further improvements in financing conditions and sustained demand for high-quality, energy-efficient buildings. These factors could determine whether Hungary’s recent return to the regional top three develops into a lasting recovery and whether international investors begin to play a larger role.