The Airbnb Equation: Navigating Budapest's Shifting Short-Term Rental Market

For years, Budapest's short-term rental (STR) market, dominated by platforms like Airbnb, has been a high-yield playground for investors. The city's booming tourism, coupled with relatively low property prices, created a perfect storm for profitability. However, in 2025, the landscape is undergoing a seismic shift. New regulations are set to fundamentally alter the risks and opportunities in this lucrative sector.

A New Era of Regulation

In response to a perceived housing crisis, soaring long-term rental prices, and resident complaints, the Hungarian government and local municipalities are implementing a series of strict new measures targeting the STR market. For investors, understanding these changes is not only important but also critical.   

1. A City-Wide Moratorium: From January 1, 2025, to December 31, 2026, a two-year moratorium will be in effect on the registration of new short-term rental accommodations in Budapest. This effectively freezes the supply of legal STRs for a two-year period.   
   

2. A Quadrupling of Taxes: The annual flat-rate tax per room for STRs in the capital will increase fourfold, from HUF 38,400 to HUF 150,000 (approximately €93 to €362). This significantly increases the operating cost for hosts.   

   
   

3. The District VI Ban: Following a resident referendum, the entirety of District VI (Terézváros), a prime tourist and cultural hub, will completely ban short-term rentals starting from January 1, 2026.   

   
   

These new rules build upon existing regulations, which already require all hosts to register with the National Tourism Data Centre (NTAK) and prominently display their official registration number on any online listing.   

Performance in a Pressured Market

Despite regulatory headwinds, the underlying performance of the STR market remains robust, driven by relentless demand from tourists. Budapest's tourism sector is booming, with international arrivals showing double-digit growth. This translates into strong metrics for existing STRs:   

• High Occupancy: Average occupancy rates are consistently high, with various data sources citing figures ranging from 52% to 76%. In prime areas like Districts V and VII, well-managed properties can maintain an average occupancy of 76% throughout the year.   

  
  

• Clear Seasonality: The market has predictable seasonal peaks and troughs. Revenue and occupancy are highest in the summer, particularly in August, and lowest in the winter months of January and February. This allows for strategic dynamic pricing to maximize revenue.   

  
  

• Dominant Property Types: The market is heavily geared towards smaller units. One- and two-bedroom apartments make up the vast majority of listings, catering to the primary tourist demographics of couples, solo travelers, and small groups.   

  
  

The "Golden Ticket" Opportunity

The convergence of these factors—growing demand, a freeze on new supply, and a significant tax increase—creates a complex but potentially highly lucrative scenario. The new regulations, while challenging, inadvertently create what can be described as a "golden ticket" for owners of existing, legally compliant STR properties.

With the supply of new licenses frozen for two years, any property that already possesses a valid, transferable STR permit becomes an instantly scarce and more valuable asset. As tourist numbers continue to climb, the fixed number of legal rooms will face increasing demand, allowing owners to command higher nightly rates and enjoy sustained high occupancy. This will likely create a two-tiered property market, where apartments with an STR license command a significant price premium over otherwise identical, unlicensed properties in the same building.

For investors, the strategy must shift. The game is no longer about finding a suitable apartment and applying for a license; it is now a strategic search for properties that come with a pre-existing, "grandfathered" permit. While these properties will be more expensive, the premium is justified by the protected, high-yield income stream they can generate in a supply-constrained market. This new reality also elevates the importance of professional property management companies, which possess the expertise to navigate the complex regulatory environment and maximize returns for owners.