Budapest is currently the most expensive of the three major Central and Eastern European residential markets compared by Cordia, with new-build home prices exceeding the equivalent of €5,200 per sqm.
That puts the Hungarian capital above Warsaw, where prices are approaching €4,700 per sqm for unfinished units, and well ahead of Bucharest, where average new-build prices remain below €3,600 per sqm.
Budapest carries the highest construction costs
Cordia data also shows that construction costs in Budapest are materially higher than in the other two capitals. For a medium-sized residential development, building costs in Bucharest and Warsaw are around 25%-30% lower than in Budapest.
By contrast, Warsaw faces a different pressure point: development land in the Polish capital costs more than twice as much per sqm as in Romanian or Hungarian capital cities.
Hungary keeps a 5% VAT rate on new homes
One of Budapest’s main advantages is taxation. Newly built homes in Hungary are currently subject to a 5% VAT rate, significantly below Romania’s 21% rate and Poland’s 8% rate for homes of up to 150 sqm. In designated brownfield regeneration areas in Hungary, the VAT paid on qualifying new homes can also be recovered.
Bucharest remains much cheaper
The price gap with Bucharest is substantial. With new homes in Budapest above €5,200 per sqm and Bucharest below €3,600 per sqm, the difference exceeds €1,600 per sqm.
Warsaw sits between the two markets at close to €4,700 per sqm, although buyers there typically receive homes in an unfinished condition and face additional fit-out costs before moving in or renting the property.
Bucharest also offers gross rental yields of around 5%-6%, broadly comparable with the Polish residential market, which gives the Romanian capital a lower acquisition cost than Budapest alongside competitive returns.
