While optimism appears to be returning to Hungary, the mood in Germany was noticeably more cautious, reflecting the challenges still facing the wider European market, according to Valter Kalaus, managing partner of Newmark VLK Hungary.
“At the Portfolio conference, there was a strong sense of renewed confidence, with discussions focusing on improving investment conditions and emerging opportunities. While there are reasons to be optimistic, I sometimes felt that the enthusiasm on stage was running ahead of actual market fundamentals,” Kalaus comments.
The figures illustrate this contradiction. Hungarian commercial real estate investment volume reached approximately EUR 610 million in the first half of 2026, representing a 26.7% year-on-year increase. However, domestic buyers accounted for about 74% of investment activity, suggesting international capital remains relatively cautious.
The Budapest office market tells a similar story. While total leasing demand reached approximately 215,000 sqm in the first half of 2026, net take-up declined by 43% year-on-year. In the second quarter, lease renewals accounted for 62% of total demand, compared with just 27% for new leases. This suggests that occupiers remain active but are prioritizing cost optimization and existing commitments over expansion or relocation.
“From our perspective as tenant representatives, companies are increasingly focused on efficiency, flexibility and long-term workplace strategies. Decisions are taking longer, and businesses are carefully evaluating whether to stay, renegotiate or relocate. In most cases relocation is not the chosen alternative due to the lack of real viable options,” Kalaus adds.
At Expo Real, he says that the atmosphere was noticeably more measured. Discussions reflected continued concerns about financing conditions, pricing expectations, and economic uncertainty. Recent industry research supports this sentiment: 40% of surveyed real estate professionals described the market as cautious or very cautious, up from 22% in 2025.
Nevertheless, European investment activity is improving. Investment volumes increased by approximately 10% in the first half of 2026, while office investment reached EUR 22.6 billion, up 13% year-on-year. These figures indicate a recovery, but one that remains selective, with investors focusing on quality assets, secure income, and realistic pricing.
For Hungary, this broader European perspective is particularly important. The market continues to offer opportunities, but attracting international capital requires more than a positive sentiment. Investors need predictable conditions, competitive returns, and confidence in long-term fundamentals.
“After 30 years in the real estate industry, I have experienced several market cycles, and one lesson remains consistent: sentiment often improves before transaction activity follows,” argues Kalaus.
Optimism is essential for recovery, he says, but he draws a distinction between positive expectations and measurable market performance. The Hungarian and European markets are showing encouraging signs, yet the recovery remains uneven.
“My takeaway from the two conferences is simple: we should welcome optimism but remain realistic. Ultimately, the strength of the real estate market is measured not by the enthusiasm expressed on conference stages, but by the investment decisions and leasing transactions that follow. Patience remains essential for at least another 9-12 months,” concludes Kalaus.
This article was first published in the Budapest Business Journal print issue of October 19, 2026.
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