Hungarian real estate faces regulatory shifts in 2025, say experts at Schönherr Hungary

Hungary’s commercial real estate sector is navigating a period of intensified legal and regulatory transformation in 2025. According to legal experts László Krüpl and Gergely Horváth of Schönherr Hungary, a series of new legislative and policy initiatives are redefining the development environment, requiring developers and investors to adopt more adaptive, compliance-focused strategies.

One of the most significant changes this year is the phased rollout of the new electronic real estate register, introduced under the Act on Real Estate Registration (Act C of 2021) and its implementing decree. Designed to modernise property records and transactions, the system aims to increase long-term efficiency but has introduced short-term complexity—particularly for institutional players less familiar with digitalised land administration. The transition coincides with the implementation of the new Act on Hungarian Architecture (Act C of 2023) and the TÉKA decree, reshaping planning and building requirements across municipalities.
“These reforms require time, training and revision of internal processes,” notes Krüpl. “While they offer long-term benefits, certain investment-critical areas remain unclear, and practical application will depend heavily on case law as it develops.”

Environmental and ESG-related compliance is also taking centre stage. The EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), now being transposed into Hungarian legislation, are beginning to reshape reporting requirements. Large real estate players are under pressure to integrate ESG data collection and monitoring into their project pipelines, contributing to a shift in how investment strategies are structured.

Additionally, a proposed amendment to Governmental Decree No. 143/2018—under discussion since June—could change the permitting process for retail units over 400 sqm. If passed, even the transfer or lease of these properties would require a function change permit, a move that may significantly affect leasing and acquisition practices.

Beyond legal registration, zoning and environmental policy have also evolved. The new architecture law places stronger emphasis on green space protection, affecting how developers approach land selection—particularly in suburban areas. At the same time, a policy preference for brownfield development is becoming more formalised. Measures such as the continuation of reduced VAT rates in designated “rust zones” and priority access to energy grid connections further support redevelopment of underutilised land.

“This shift presents both a challenge and an opportunity,” says Horváth. “Developers who align their strategies with sustainability objectives are likely to be better positioned moving forward.”

In the area of construction law, contract terms are shifting toward more balanced risk-sharing. Recent trends show stronger enforcement of liquidated damages, along with greater contractual detail on force majeure and material price volatility. Meanwhile, alternative dispute resolution mechanisms such as arbitration and mediation are becoming standard practice, especially for cross-border projects, offering greater predictability and confidentiality.

There have also been updates affecting tax and financing. As of January 2025, monument-listed properties are exempt from building tax for up to three years post-acquisition, encouraging redevelopment of historical buildings. The reduced 5% VAT incentive on brownfield residential developments has also been extended. Financing incentives, such as green loans and tax advantages for ESG-certified projects, continue to gain traction, often supported by the Hungarian Development Bank.

Looking ahead to the second half of the year, Krüpl and Horváth caution that while market sentiment is showing signs of stabilisation, key legal risks remain. Although vacancy rates have levelled off, financing remains selective, and concerns persist around regulatory unpredictability. Compliance with new ESG rules, zoning restrictions, and sustainability reporting frameworks will be critical areas for ongoing attention.
“In this evolving landscape, proactive legal planning and risk mapping will be key,” the Schönherr team advises. “Developers and investors who prioritise energy efficiency, regulatory compliance, and long-term adaptability will be best equipped to navigate the current cycle.”

Prima Development’s pragmatic approach to residential living in Bucharest

In a competitive and evolving residential market, Prima Development Group is focusing on practical, design-driven housing solutions. The Prima Vista project in northern Bucharest is a key example of the company’s strategy to adapt to constraints while delivering long-term value. Co-CEO and Partner Adrian Stoichină spoke with CIJ EUROPE about how the company is redefining large-scale housing developments.

Prima Vista was acquired as a partially completed project, with four of the thirteen planned buildings remaining. The new owners could not alter the permitted structure or height of these buildings. Rather than view these limits as restrictive, Prima used them to refine its internal design process. The company ran a competition among architectural firms, evaluating proposals not just through internal review but also by polling potential residents. The question wasn’t about which concept people preferred aesthetically, but which one they would actually choose to live in.

This approach guided decisions at every stage—from façade design to apartment layout and landscaping. Each unit was assessed individually for both function and appeal, based on how buyers typically evaluate properties: through a single visual impression.

Prima Vista’s strategy balanced cost and quality. Rather than compete directly with luxury projects nearby, the company positioned the development at a more accessible price point while maintaining a high standard of workmanship. Apartment sizes range from 38-square-metre studios to 98-square-metre penthouses, aiming to attract a wide range of buyers. According to Stoichină, women tend to lead the selection process based on interior layout, while men often evaluate construction quality and technical details.

The location is also a key asset. Situated in an established residential area with schools, retail, and transport connections nearby, the project appeals to people working in nearby business districts like Pipera. The development’s proximity to Bucharest’s ring road and other infrastructure adds to its practicality for families and professionals alike.

Looking ahead, Prima Development has a pipeline of over 3,000 apartments across multiple Bucharest districts. One upcoming project on Șoseaua Gheorghe Ionescu-Sisești will include 2,000 units with direct lake access and public amenities such as kindergartens, green spaces, and retail. The goal is to create integrated neighbourhoods that function as self-contained communities within a 15-minute radius.

Sustainability is part of the broader plan, though Stoichină acknowledges that environmental considerations are not yet top priorities for most buyers. At Prima Vista, sustainability upgrades were limited due to existing permits, but provisions were made for EV charging infrastructure. In contrast, newer projects like Prima Astera are designed to meet Near Zero Energy Building (NZEB) standards. For Prima, environmental features will become more important as regulation evolves.

Construction quality remains a central concern. Prima acts as its own general contractor, which allows greater control over execution. However, ensuring consistent quality across projects presents challenges. Stoichină notes that the broader market does not always prioritise quality control, so Prima invests in long-term partnerships with contractors who are open to higher standards—even offering financial support to help them grow.
Buyer expectations are also rising. More clients now engage technical consultants during site visits and ask detailed questions about materials and project history. Stoichină views this as a positive development, one that encourages transparency and helps buyers make informed decisions. Prima supports this by directing potential buyers to completed projects to assess quality for themselves.

With projects currently under way in both Bucharest and Oradea, Prima aims to deliver approximately 500 apartments per year in each city. But for Stoichină, growth is not the only metric of success. The company is focused on building a reputation based on trust, consistent delivery, and long-term quality.

Looking to the future, Stoichină envisions residential areas with no surface parking, more shared green spaces, and infrastructure that fosters community life. The objective is to create environments where families can connect and children can safely play outdoors—neighbourhoods built not only for living, but for interaction.
In a market shaped by volatility and shifting expectations, Prima Development Group is prioritising stability, functionality, and thoughtful urban planning—delivering homes that reflect how people actually want to live.

Central Europe reshapes VAT policies: Romania joins regional trend with real estate tax hike

Romania will raise its standard VAT rate from 19% to 21%, eliminating previous reduced rates of 9% in favor of a new flat under EUR 120,000 value. However, a transitional measure allows homebuyers to still access the 9% VAT rate for new residential units under 120 square meters and priced below RON 600,000, provided they sign a pre-contract and pay at least 20% in advance by July 31, 2025, with the final sale contract concluded by July 31, 2026. This change reflects a broader trend among Central European countries to streamline VAT systems and reduce tax exemptions.

In neighboring Slovakia, the government implemented a VAT increase from 20% to 23% at the beginning of 2025, modifying reduced rates as well. The Czech Republic simplified its VAT system in July 2025 by merging its two reduced bands into a single 12% rate, while also introducing new rules that affect how VAT applies to real estate transactions. Hungary, in contrast, has retained its favorable 5% VAT on new residential units, extending this reduced rate through at least the end of 2026 to support housing affordability.

These fiscal adjustments have had mixed effects. In Slovakia and the Czech Republic, higher VAT rates have increased the cost of real estate services, prompting concerns about affordability and sector resilience. Hungary’s strategy to preserve its 5% rate has helped cushion housing prices in a market already grappling with inflation and construction delays. Poland has kept its VAT rates stable but introduced clearer definitions that impact how developers apply VAT to housing, aiming to improve compliance and transparency.

In Romania, the upcoming tax increase is expected to have a significant impact on the residential real estate market. Analysts suggest that the higher VAT could raise the total cost of a standard three- to four-room apartment in Bucharest by tens of thousands of euros, making home ownership increasingly difficult for average buyers. Developers are reportedly exploring ways to fast-track transactions to help customers lock in the lower 9% VAT rate before the deadline. However, the new rate could ultimately slow housing demand and shift the focus of development toward rental properties, a trend that has already gained traction in Poland, Hungary, the Czech Republic, and Slovakia over the past decade.

Overall, the shift in VAT policy across the region is reshaping housing markets. While the goal is often to increase public revenues and simplify tax systems, the outcome in each country depends on how such changes balance fiscal consolidation with housing accessibility and economic growth. Romania’s decision is in line with regional fiscal tightening but could bring significant challenges unless offset by support mechanisms for both developers and buyers.

EU construction production increases in May 2025

Construction production in the European Union increased slightly in May 2025, according to the latest report released by Eurostat. Compared with April 2025, seasonally adjusted production in the construction sector rose by 0.2% in the EU and 0.1% in the euro area. On an annual basis, production was up by 0.7% in the EU and 1.3% in the euro area compared with May 2024.

The modest monthly growth in May was driven primarily by an increase in building construction, which rose by 0.3% in the EU and remained stable in the euro area. In contrast, civil engineering output declined by 0.4% in the EU and by 0.1% in the euro area.

Among the member states with available data, the largest monthly increases in construction production were observed in Slovenia (+5.0%), Slovakia (+4.5%), and Hungary (+3.9%). On the other hand, the biggest declines were recorded in Belgium (-4.2%), Sweden (-3.8%), and France (-1.4%).

Looking at the annual comparison with May 2024, building construction was up by 1.3% in the euro area and 0.9% in the EU. Civil engineering also increased by 1.2% in the euro area and 0.2% in the EU.

The report highlights a continuation of a slow recovery trend in the European construction sector following earlier volatility. However, results vary significantly between member states, reflecting diverse national economic conditions and construction market dynamics.

Austria’s greenhouse gas emissions decrease by 6.4% in 2023

Austria recorded a significant 6.4% year-on-year reduction in greenhouse gas (GHG) emissions in 2023, amounting to a total of 69.9 million tonnes of CO₂ equivalents. This marks a substantial drop from the 74.6 million tonnes recorded in 2022, and places emissions 1.1% below pre-pandemic levels in 2019, according to provisional data published by Statistics Austria.

The reduction in emissions was largely driven by notable declines in the energy supply sector, which cut its emissions by 16.8%, and the industrial sector, which saw a 7.3% decrease. The energy sector’s reduction is attributed primarily to a significant drop in the use of natural gas and coal for electricity and heat production. Industry emissions were impacted by a decline in energy-intensive manufacturing output.

The transport sector, which has historically been the largest source of emissions in Austria, posted a modest 1.6% reduction in 2023. Although this sector still accounts for approximately 30% of total emissions, the drop suggests a slight improvement in fuel efficiency and potentially increased adoption of alternative mobility solutions.

Emissions from households and the services sector fell by 4.5%, reflecting reduced heating requirements due to milder winter temperatures and continued improvements in building energy efficiency. Emissions from agriculture remained relatively stable with a slight increase of 0.3%, while the waste management sector recorded a modest decline of 1.4%.

Austria’s total GHG emissions for 2023 were 3.6 million tonnes below the average level for the years 2015 to 2021, highlighting a potentially sustained downward trend. The data reflect emissions from sectors covered under the EU Effort Sharing Regulation (non-ETS) as well as those subject to emissions trading (ETS), with both contributing to the overall decline.

Source: OECD

Trade tensions weigh on growth prospects for emerging Asian economies

Emerging Asian economies are beginning to feel the impact of escalating global trade tensions, with growth projections revised downward in several countries across the region, according to economic data and policy briefings released in July 2025.

After a period of strong post-pandemic recovery, many of Asia’s developing markets are now contending with slowing exports, weaker investment inflows, and mounting pressure on currency stability. The cooling global demand and increased use of tariffs, particularly by major economies like the United States and China, have disrupted key supply chains and led to rising uncertainty among manufacturers and investors alike.

In its latest regional update, the Asia Development Outlook indicated that while countries such as Vietnam, Indonesia, and the Philippines continue to show positive growth, the pace has moderated compared to earlier forecasts. Economies that are heavily dependent on exports, such as Malaysia and Thailand, are seeing more pronounced effects from reduced international demand and logistical bottlenecks.

One of the key concerns flagged by analysts is the decline in foreign direct investment in sectors tied to global trade. Investment in export-oriented manufacturing has slowed considerably, with multinational firms reconsidering expansion plans due to geopolitical risks and shifting trade policies. Meanwhile, capital flight and pressure on local currencies have forced several central banks in the region to intervene or revise interest rates to stabilize their economies.

The slowdown also affects regional integration efforts and the performance of trade blocs such as the Regional Comprehensive Economic Partnership (RCEP), as member countries attempt to shield domestic industries from external shocks. Despite efforts to diversify trade partners and promote intra-Asian commerce, the overall growth outlook remains fragile amid tightening global financial conditions and an unpredictable policy landscape.

Experts warn that unless the international trade environment stabilizes, emerging Asian economies may need to rely more heavily on domestic consumption and structural reforms to sustain growth. Policymakers across the region are now balancing short-term measures to support export sectors with longer-term strategies aimed at improving resilience and competitiveness.

Food prices continue to rise in Slovakia despite lower VAT on basic items

Food prices in Slovakia continue to climb, even though the value-added tax (VAT) on basic food items was reduced from 10% to 5%. The opposition has raised concerns that the government’s efforts to combat inflation are having limited effect, with consumers still facing higher costs at the checkout.

Drawing on data from the Statistical Office, the opposition highlighted that prices for several staple foods have increased year-on-year. Bread rose by 1.2% in May, cheese by 8.6%, and butter saw a significant 24% increase. Even items subject to the reduced 5% VAT have shown price volatility, while other foods taxed at the standard 19% or 23% rates have also surged. Mineral water rose by 6.1%, and egg prices jumped nearly 30%. New taxes, including a sugar tax, have contributed to sharp rises in fruit prices, with raspberries up between 26.6% and 44.6%.

Although government representatives have claimed that food inflation is under control, the opposition points to both statistical data and everyday consumer experience to argue otherwise. They suggest that new fiscal policies, including the financial transaction tax and higher VAT on many goods and services, may be indirectly contributing to price increases across the retail food sector.

In June, food and non-alcoholic beverage prices were again affected by broader inflationary pressures. Despite assurances from the Ministry of Finance that increased VAT revenues would support the state budget, updated forecasts indicate that tax collection may fall short of earlier expectations.

Critics argue that Slovakia lacks a comprehensive analysis of the food supply chain—from production to retail—which could help identify the true drivers of price increases. With Slovak households spending on average 21% of their budgets on food and beverages, the impact of rising prices is felt most acutely by low-income families.

Source: TERAZ

U.S. tariffs weigh on imports, but global trade adjusts and persists

While U.S. tariffs have led to a significant decline in imports from China and Canada, international trade continues to function through redirection and adaptation, according to the latest economic commentary from the Institute of Financial Policy (IFP) under the Slovak Ministry of Finance.

U.S. imports from China dropped nearly 42% year-on-year in May, amounting to a nominal decline of $14.5 billion. This figure represents roughly 0.4% of annual U.S. imports and 0.1% of China’s GDP. Imports remained subdued in June, down more than 16% compared to the same period last year. Despite this, China’s overall exports continued to grow by an average of just over 5% in May and June, suggesting that Chinese exporters are finding alternative markets or routing products through third countries to circumvent tariffs. However, export volumes to the EU have recently stagnated, prompting China to shift more attention to other Asian markets.

At the same time, the weakening of the U.S. dollar has yet to yield a positive effect on the country’s trade balance. A lower dollar typically helps domestic production by making imports more expensive and exports more competitive. Since the beginning of the year, both the euro and the Japanese yen have strengthened against the dollar by more than 8%. This shift has not curbed the growth of European and Mexican exports to the U.S., which continue at a stable pace.

Despite a temporary improvement in April, the U.S. trade deficit remained high in May. Analysts suggest that the ongoing dollar depreciation, coupled with growing uncertainty, could lead to a slowdown in imports from Europe. The sharp weakening of the dollar in recent months may reflect a loss of investor confidence in U.S. fiscal policy. This is evidenced by the recent divergence between interest rates and exchange rates, as well as a disconnect between the performance of stock markets and bond yields.

Traditionally, countries offering higher bond returns attract more capital, thereby strengthening their currencies. U.S. bonds still offer higher interest rates than their European counterparts, yet the dollar continues to lose ground. This contradicts the usual pattern seen during global market volatility, where the dollar acts as a safe haven.

The IFP concludes that recent developments, including persistent budget deficits and fiscal strategies viewed as unsustainable, are undermining investor trust and contributing to the dollar’s weakness, even in the context of rising U.S. interest rates.

Source: TERAZ

Slovak Post cancels plan to close hundreds of branches, confirms franchise shift in rural areas

Slovak Post has officially refuted claims that it plans to close hundreds of post office branches across the country. In response to criticism from opposition party Progressive Slovakia (PS), the company confirmed that only 26 regional branches will cease operations, alongside 29 district branches, which will be replaced by upgraded facilities offering extended services and improved accessibility.

“The Slovak Post will not close hundreds of branches,” said spokeswoman Eva Peterová. “We’ve been transparent for weeks about the closure of 26 regional and 29 district branches. These will be replaced by branches with longer opening hours, more service windows, improved access via public transport, and better parking options. The new locations will be within 850 meters to 3.5 kilometers of the original branches.”

Peterová added that rural branches will not be closed but instead gradually converted into franchises, with discussions underway in cooperation with local municipalities.

The company highlighted that many traditional post office functions, such as paying pensions, bills, or sending parcels, are now handled by postal delivery personnel. Additional services, including online shipment processing, parcel redirection, and delivery rescheduling, are available through the Slovak Post’s website and mobile app.

Slovak Post pointed out that its services remain accessible in nearly 2,000 municipalities that have never had a physical post office. The company noted a shift in public behavior, with fewer people visiting branches in person as more customers turn to delivery services, couriers, and digital tools.

The opposition PS had warned that beyond the closures in regional and district centers, further branch shutdowns in rural areas would force residents to travel long distances to access basic postal services. The party criticized the plan, arguing it would reduce service accessibility in smaller communities.

Slovak Post maintains that the reorganization is aimed at modernizing services and improving efficiency without reducing access for customers.

Source: TERAZ.SK

Over 10% of Polish courier firms listed as debtors, industry debt tops PLN 106 million

The Polish courier sector continues to expand, fuelled by rising e-commerce demand and changing consumer habits. According to the latest data from the Register of Debtors BIG InfoMonitor and the BIK database, however, this growth is not without financial strain. Despite handling more than 1.2 billion parcels annually and generating nearly PLN 13.7 billion in revenue in 2024, over 10% of courier companies are now listed as unreliable payers, with overdue liabilities surpassing PLN 106 million.

Figures show a slowdown in the rate of debt accumulation compared to previous years, but the total value of arrears still rose by 3.3% year-on-year as of May 2025, and by nearly 42% over the past five years. Much of the financial pressure stems from rising operational costs, such as fuel and infrastructure investment, alongside stagnant income. The average net revenue per parcel has remained around PLN 11 for years, while consumer expectations for free shipping continue to mount.

Although Poland’s courier industry is dominated by a few major operators accounting for over 99% of total revenues, thousands of small subcontractors operate under these brands. For these smaller firms, the average outstanding debt of PLN 58,456 can significantly impact liquidity and long-term viability.

Waldemar Rogowski, Chief Analyst at BIG InfoMonitor, notes that even minor payment delays can trigger broader cash flow disruptions across the KEP (courier, express, and parcel) sector. A notable portion of industry debt also originates from unpaid invoices owed by clients. Rogowski emphasizes the importance of proactive risk assessment, including the use of business information services to vet partners and respond early to warning signs.

Looking ahead, the Office of Electronic Communications (UKE) projects courier volumes will exceed 1.65 billion shipments by 2027, driven primarily by continued growth in e-commerce. While volume growth may put pressure on margins, operators that actively manage liquidity and mitigate payment risks are well positioned to benefit from the sector’s overall expansion.

Source: BIG InfoMonitor

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