The National Bank of Hungary’s Commercial Real Estate Market Report assesses that Hungary’s market may have passed its cyclical low, but weak economic growth and uncertainty could prolong the recovery. Vacancy rates are expected to rise in Budapest’s office and industrial and logistics markets. Banks’ commercial real estate loan exposures show no evidence of excessive risk taking, although risks associated with their real estate bond holdings increased in the second quarter of 2026. Investment turnover reached approximately EUR 560 million in the first half of 2026, up 50% from a year earlier but still moderate. Domestic investors accounted for 80% of transaction volume, compared with 61% in 2025. Budapest office vacancy fell 0.3 percentage points to 12.2%, while industrial and logistics vacancy rose 2 percentage points to 14.8%, exceeding its long-term average of 10.5%. Planned completions and current demand point to higher vacancy rates in both segments. Geopolitical tensions and higher euro yields also constrain investment activity and valuation gains. Banks disbursed 21% more project loans secured by commercial real estate than a year earlier, without an overall deterioration in the portfolio’s risk classification. Lending survey responses indicated that 10% of banks planned to tighten office project lending standards in the second half of 2026, citing sector risks and overvaluation. Under an earlier decision, a 1% sectoral systemic risk buffer has applied since Jan. 1, 2026, to support banks’ resilience against commercial real estate exposures. An average loan-to-value ratio of around 50% and a low proportion of nonperforming loans mitigate portfolio risks.

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