The Hungarian construction sector experienced a significant slowdown in Q1 2025, with the value of new construction starts dropping sharply compared to the previous quarter and the same period last year. This weak start comes despite a surge in activity at the close of 2024, driven by major project launches.
According to the EBI Construction Activity Report, the total value of started construction works in Q1 2025 was approximately HUF 570 billion (at current prices). This marks the second lowest quarterly value recorded since July 2020. When adjusted for price changes, it represents the second-worst three-month Activity-Start since 2015.
"The first quarter of 2025 has been challenging for the Hungarian construction industry, especially following the strong finish to last year," said Tünde Tancsics from Eltinga. "However, the robust activity in the multi-unit residential sector offers a glimmer of optimism, reflecting a responsiveness from developers to market demand. We will be closely monitoring how demand evolves throughout the year, particularly with upcoming interest payments and maturing government bonds."
At the same time, the building construction segment saw a slight improvement, primarily due to a notable increase in multi-unit residential projects. The value of started works in this sub-segment surpassed HUF 500 billion, an 18% rise from Q4 2024. This uptick aligns with growing demand, as evidenced by a record number of new multi-unit dwelling sales in Budapest over the last two quarters.
In the first three months the value of construction starts in the multi-unit residential segment was almost HUF 300 billion at current prices. It has been a record since 2014 and exceeds the previous quarter’s highest value (HUF 209 billion). Even at constant price, the growth in Activity-Start is a 39% rise over Q4 2024.
Conversely, the non-residential sector continued its low trend from late 2024, with only HUF 240 billion in new construction starts – the lowest quarterly figure since 2017.
The total value of construction starts of industrial buildings and warehouses stood at over HUF 150 billion, which was slightly higher than in the previous two quarters.
Civil engineering projects were particularly hard hit, registering an extremely low HUF 31 billion in started works, and notably, no civil engineering project was among the largest launched in Q1 2025.
Budapest maintained its lead in regional construction activity, accounting for 32% of all projects started in Hungary over the last four quarters.
