Mixed start to 2026 in Hungarian construction

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As per the latest EBI Construction Activity Report, 2026 did not start badly in Hungary for construction. Activity-Start in Q1 did not substantially lag behind Q1 2025 and Q1 2023, in fact, it slightly exceeded the average quarterly values ​​of these years. At the same time, the start of foundation works of Block 5 of Paks 2 nuclear plant played a major role in higher numbers, adding a more nuanced picture. Projects worth around HUF 740 billion entered construction in Q1 2026. At constant price, Activity-Start did not lag greatly behind the same period of 2025 (-9%), but we have still seen the weakest first three months since 2016.

EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). To obtain the report, please contact us.

Building construction returns to last year’s level

2026 started much weaker in building construction than last year, but the Activity-Start of around HUF 500 billion was roughly in line with the average quarterly level of 2025 and was only 6% below the average quarterly value of 2024. Hence, no major decline compared to the previous two years at current price. Even at constant price, the value of construction projects started in the first three months was close to the average quarterly level of last year, but it was double-digit below the average three-month Activity-Start between 2016 and 2024.

Multi-unit housing construction is still the segment keeping building construction at a higher level. Activity-Start for non-residential construction between January and March this year (HUF 263 billion) exceeded the average quarterly value of 2025, which was considered weak, but fell 33-44% short of the average values ​​between 2021 and 2024. At constant price, this year’s first-quarter Activity-Start has been one of the weakest since 2015.

Biggest started non-residential projects in Q1 2026 comprised several logistics and office buildings such as Phase 3 of Láng-negyed V1 office building and Frontiers Campus office and research centre in Budapest, and the renovation of BorsodChem offices in Kazincbarcika, Phase 3 of CTP VCS5 Logistics Centre in Vecsés, building D of VGP Park Beta logistics centre in Győr, building B of Panattoni Logistics Park in Mosonmagyaróvár, and Phase 1 of Penny Market logistics centre cold storage in Alsónémedi.

Paks 2 boosted civil engineering figures

In Q1 2026, the value of started civil engineering works neared HUF 240 billion boosted by the start of foundation works of Block 5 of Paks 2 nuclear plant, while the Activity-Start in road and railway projects was only HUF 20 billion. Apart from Paks 2, only one civil engineering project got into the largest projects in Q1 2026: the construction of Phase 2 of the industrial park in Nyíregyháza.

Budapest: regional heavyweight again

Budapest continued to be the region with the highest value of construction works started in Hungary with a share of 30% in total Activity-Start in Q1 2026. Based on the four-quarter moving averages, the share of Central Transdanubia was still considerably higher than in previous years thanks to the M1 motorway expansion launched in Q3 2025. Pest County, Southern Transdanubia and the Northern Great Plain accounted for about 9% of started constructions, while the share of other regions varied between 5% and 6%.

Multi-unit home construction still high

After a weaker final quarter last year, this year started with an extremely strong first three months for multi-unit housing. Between January and March, the value of started construction works exceeded HUF 240 billion at current price; the third highest quarterly Activity-Start since 2014. This value is significant even at constant price: only 2017-2018 and last year had stronger quarters.

The great increase in permits last year suggested strong activity at the beginning of this year. The latest EBI Construction Activity Report has found that many large projects have moved closer to planned start recently, also predicting a higher Q2 Activity-Start in the segment. However, there is a lot of uncertainty in the market now as projects within the Otthon Start Program are expected to be reviewed, which may change developers’ plans.

In Q1 2026 the value of completed multi-unit building was about HUF 83 billion, still considered a moderate level. At constant price, it is particularly low. But it comes as no surprise as previous years were characterized by restrained project launches, and the large-scale projects that started last year are set to be completed only later.

Looking at the past four quarters, about two-third of multi-unit building projects entering construction phase concentrated in Budapest, so the capital’s share remains exceptionally high. About 69% of projects started in Central Hungary, 13% of the Activity-Start was linked to Eastern Hungary, while Western Hungary’s share was 18%.

Non-residential construction: after a weaker last year, this year started slowly

Within the subsector, two segments accounted for the majority of the Activity-Start: offices and industry. Offices performed rather poorly in previous years but recovered somewhat in Q1 2026 with their share within non-residential construction going up to 34% compared to 9% in the previous two years. Industrial properties and warehouses continued to account for the other major part despite the decline (their share dropped to 36% against 44-54% in the previous four years). In the first three months of this year, about 9-10% of started non-residential projects were related to wholesale and retail and education.

In 2026, besides the previously mentioned office, industrial and logistics projects, the largest non-residential projects also included Cholnoky Jenő Student Camp in Révfülöp, Rheinmetall RDX explosives factory in Várpalota, Mixvill shopping center in Debrecen, and Phase 1 of MyRA Park M3 shopping park. In 2025, non-residential construction was also characterized by weaker Activity-Start, but several high-value projects were launched such as the special operations barracks in Szolnok, BYD’s assembly hall, logistics warehouse, press plant and lightweight construction plant in Szeged.

In the past three years, non-residential projects reached completion at an exceptionally high value, between HUF 1,600 and 1,700 billion. During this period, Phase 1 of eMAG logistics centre, certain elements of BMW and Mercedes-Benz projects and several logistics projects were completed, including Robert Bosch logistics hall in Miskolc. Activity-Completion indicator may remain at a high level this year as well. The Hungaroring paddock building has already been handed over and several elements of BYD projects, Samsung Göd expansion, and several CATL buildings in Debrecen may also be completed.

Original article: Tünde Tancsics (ELTINGA); English version: Eszter Falucskai (Buildecon)

Croatia’s construction sector: a potential casualty of war

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Written by Michael Glazer (SEE Regional Advisors) and Tatjana Halapija (Nada Projekt), EECFA’s Croatian members

The Croatian economy, including its construction sector, is threatened with serious damage this summer. For now, the pain has not been intense and the danger perceived only vaguely. This could change massively for the worse, though, both as to the actual injury and the perception of danger, by the middle of June and even as early as the end of May. Many factors are at work, but there is only one cause: the US-Israeli-Iran war.

Croatian tourism Summer 2026? – Split, Croatia. Photo by Tatjana Halapija

The cause

Ship traffic through the Strait of Hormuz, which links the Persian Gulf with the Arabian Sea and so with the rest of the world, has fallen 97%. This is twice as much as in any other oil crisis. This means that crude oil and liquified natural gas (LNG) are no longer being transported in anything resembling normal quantities. Nor are sulfur (an important chemical industry feedstock) or helium (used mostly in cooling, e.g., of MRI scanners), which are produced primarily as byproducts of oil and gas extraction and of which Gulf countries are major suppliers. The same holds true for fertilizer, ethanol, graphite, aluminum, iron and steel pellets and glycol, of which, again, Gulf countries manufacture a large portion of global production. (Pistachio nuts, too, but the effect on the world economy is likely to be less pronounced.) Worse, a significant amount of Gulf petroleum, gas and chemical production capacity has been destroyed or damaged (e.g., up to 17% of Qatar’s LNG production capacity) or will be if the war continues (shut downs often damage oil and gas wells and pipelines).

Although Asia is already suffering severely, with some countries mandating four-day work weeks to save energy, Europe and the United States have been spared the worst effects of these developments so far. That is about to change as supplies of oil, LNG and, even more important in the immediate and short terms, their refined products such as jet fuel and diesel become tight after ships in transit unload and private and national reserves are depleted.

Effects on Croatia: tourism, economy and construction

For Croatia, this will likely alter the sources, type, number and ability to spend of the tourists on which the country’s economy in large part depends .Tourists from distant countries will be deterred from flying to Croatia as the price of tickets and the number of canceled flights, already in the tens of thousands, rapidly rise because of enormous increases in jet fuel prices (doubling in Europe since February 28, 2026). Some in Europe may decide to drive instead, but they and tourists that normally drive to Croatia will find that fuel is expensive. Croatia’s languid approach to upgrading and extending its railways means that rail will for the most part not be a realistic alternative, and anyway rail ticket prices will rise, too, because of higher electricity and diesel prices. The upshot for Croatia is that many tourists may decide to completely alter their holiday plans and vacation nearer to home than Croatia, while those that do come will probably not stay as long and have less money to spend than in the past. This would significantly reduce the income Croatia derives from tourism. Croatia’s reputation for high costs, which higher agricultural product prices due to fertilizer shortages will worsen, will likely exacerbate the problem.

The implications for the Croatian construction industry are that hospitality-facility construction will likely fall in the near term, as owners, operators and investors wait to see just how bad and how long the economic effects of the war will be. The wait could be a long one, given that analysts forecast that these effects will last for at least eighteen months and perhaps considerably longer, particularly if the industrial and storage facilities of belligerents and their allies are targeted in a new outbreak of hostilities.

Damage to Croatia’s tourism sector will of course flow through to the country’s other economic sectors, given how important tourism is to Croatia’s economy. But these sectors will likely be hit directly as well. Further stagnation in countries to which Croatia exports non-tourism goods and services is to be expected because of the rise in the costs of energy and raw and intermediate materials, especially but not only plastics and others made from petroleum. This will put further strain on the Croatian economy.

Aggravating this will be a likely rise in the prices of at least some construction materials. Three examples among many are rebar and cement, both of which are energy intensive to produce, and concrete, which uses petrochemical-based additives. And of course transportation costs will rise. One, rather dim, bright spot is that weak economies in countries to which Croatian construction workers have emigrated could encourage them to return home, helping to keep construction costs down. But taken all in all, the growth rate in output of Croatia’s non-hospitality construction sectors is likely to decline and in some cases to go negative. Even government construction projects may be at risk, because payment of energy, agricultural and other subsidies will deplete the government’s cash reserves and reduced economic activity will diminish its tax take.

The future

The question now is not whether the US-Israeli-Iran war will have significant negative effects on construction in Croatia but rather just how bad those effects will be. In the unlikely event that shipments through the Strait of Hormuz resume before the end of May, the effects would be minimized, although to be clear that does not mean that they would be minimal. If the Strait remains blocked beyond the end of June, consequences for Croatia could be quite substantial, since, analysts believe, European reserves of oil, gas and other important products would by then be exhausted. This would cause prices to jump sharply and continually until recession or other events reduced demand to a level that accorded with supply. If hostilities cause additional significant degradation in Gulf region infrastructure, the situation for the construction sector of Croatia, and that of many other countries, could become quite severe.

Croatian construction market forecast is available in the EECFA Forecast Report Croatia. For sample report or orders, contact us.

The next big thing for Serbia: the Belgrade Metro

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Written by Dejan Krajinović, Beobuild Core d.o.o., EECFA Serbia

The construction of the Belgrade Metro stands as the largest single civil engineering project on the horizon and is one of the primary drivers of future economic growth in the coming years in Serbia. For decades, public transport in Belgrade relied solely on buses, trams, and the city railway (BG Voz). Consequently, the development of a comprehensive underground system is expected to have a transformative effect on commuting patterns and travel times. It is worth noting that Belgrade remains the largest city in Europe without a functional underground metro. While the project faced delays for many years, its commencement is now certain, with preparatory works already well underway.

Two massive Belgrade metro Tunnel Boring Machines ready to be shipped from China. Photo by Beogradski metro i voz

Strategic infrastructure: impact of the Belgrade metro project

The project represents a large-scale international collaboration between China and France. The Chinese construction giant PowerChina is tasked with tunnel boring, while the renowned French company Alstom will provide the rolling stock and system management. Recent reports from China confirm that massive, custom-made Tunnel Boring Machines (TBMs) for the Belgrade Metro are ready, having undergone factory testing, and are set to be shipped to Serbia this June. Two TBMs have been constructed for the first phase of the project, specifically for Line 1. These machines will start boring from opposite ends of the line to meet halfway – a strategy that will make the construction process highly efficient and significantly faster, though it demands exceptional coordination and project management.

Line 1 of the Belgrade Metro is divided into two phases: Phase 1 spans 15km and includes 15 stations, while Phase 2 is a planned extension of an additional 6km and 5 stations. The majority of Phase 1 will be underground, with 11km consisting of deep tunnels and 2km constructed using the cut-and-cover method; only 2.1km of the line will be above ground. The city’s topography presents a significant challenge as some stations will be remarkably deep and complex, reaching up to 40m below ground level. The system will utilize driverless, autonomous vehicles and digital signaling, ensuring maximum efficiency, safety, and frequency.

The original plan envisioned the construction of Line 2 (21km with 23 stations) beginning two years after Line 1, allowing the two projects to partially overlap. However, at this stage, it is uncertain whether parallel realization will proceed as planned. The pace of other phases will depend on the progress of Phase 1 of Line 1, but financial considerations will remain the major factor affecting the speed of future development.

Nevertheless, with the start of Line 1, Belgrade has embarked on a long and ambitious journey that will define the city’s construction landscape for years to come. Estimates suggest that Line 1 could cost between EUR 3.5 and EUR 3.8 billion,meaning the project’s scale will have a tremendous impact on civil engineering output from 2027 onwards. This is a key infrastructure development aimed at boosting growth against recessionary trends in the EU and an unstable global economic environment. On the other hand, the looming dangers of energy shocks, high inflation, and global financial instability remain significant risks—not only for this project but for Serbia’s entire construction industry and the economy as a whole.

Serbian construction market forecast is available in the EECFA Forecast Report Serbia. For sample report or orders, contact us.

Top trends to track in 2026 in Romanian residential market

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Written by Dr. Sebastian Sipos-Gug – Ebuild srl, EECFA Romania

Dr. Sebastian Sipos-Gug, EECFA’s Romanian analyst has looked at the trends that are worth monitoring in the residential market in Romania this year. Among them are the construction costs boomerang, the drop in wages and consumption, considerable interest in multi-family buildings, smaller homes and a greater dependence on mortgage loans.

What we saw in 2025

The construction market faced many challenges in the previous year, alongside the entire national economy. While there was a focus on civil engineering, especially when it comes to EU co-funded projects, the rest of the segments lagged behind.

In early 2025, the removal of fiscal facilities for construction employees led to the decline of their net incomes, and an increase in wage-related expenses for companies. Overall, the effect of this measure was an increase in construction costs.

Then came the multiple shocks of the liberalization of energy markets in July, and a VAT increase in August, which pushed inflation upwards significantly, with the CPI reaching 9.88% in September. In a snowball effect, this led to lower real wages and disposable income, which translated into a reduction in private consumption, and, ultimately, means lower demand for residential construction on the short and medium terms.  

The optimism shown in the increased number of permits, and the useful building area in them, compared to 2024, is countered by the decline in the number of completed homes. Thus, while developers might be looking to the future, their actions in the present are lacking, also evidenced by a significant (-21%) annual decline in the value of started construction works in 2025 (source: EBI Construction Activity Report).

What to watch in 2026

Construction costs boomerang. While previously the expectation was that construction costs would gradually decline in 2026, they proved quite resilient to changes in wages, and fuel and construction materials prices remained relatively stable in the past year.  Thus, late 2025 forecasts placed construction costs on a small, descending trend.

The conflict in Iran and its repercussions on oil and gas prices might throw astray these predictions. As of March 2026, oil prices were approaching 2022 levels, and, if they are not reversed rapidly, might have a similar impact on world-wide inflation, energy prices and, eventually, construction costs. A reversal, however, seems rather unlikely at the moment as the damage to energy infrastructure could take years to undo.

To make matters worse, in the past few years home prices grew slower than construction costs, reducing potential profit margins for developers. Added to the decline in real wages, it remains quite unlikely that there will be room for prices to increase alongside construction costs, again similar to 2022, further eating into builders’ financial return potential.

Decline in wages and consumption. Wage growth for 2026 was already forecasted to remain low, underperforming inflation (source NFC – National Forecasting Commission Autumn 2025 Report). Add to that the further shocks now expected from increased energy costs (due to oil and gas prices rising considering the conflict in Iran) and food costs further rising due to increased fertilizer prices, the downwards pressure on real wages is likely to be worse than forecasted, with a slower recovery.

Real wage decline will make it harder to purchase and build new homes, with a negative impact on demand for residential construction. But it could provide a boost to renovation activity, especially when it comes to energy efficiency, as switching homes becomes harder.

High interest in multi-unit residential buildings. Looking at building permits trends for the past decade, single-home buildings have remained relatively stable, while the majority of growth was due to multi-unit buildings. Under price pressure, on the backdrop of restricted wage growth and a contractionary macro-economic outlook, it remains most likely that for the near future we’ll continue to see more interest in the latter. Another connected issue is that of internal mobility, with migration from rural to urban areas in search for education and economic opportunities, increasing demand for denser residential construction.

Smaller homes. While the mean area in permits remained relatively stable between 2017 and 2025, there is a historical precedent in economic downturns leading to smaller homes being built so as to increase accessibility. Since the economic outlook for the year seems to have worsened, this could be the case again in 2026.


Increased reliance on mortgage loans. Despite the highest interest rates seen in a decade, the volume of new mortgage loans increased dramatically in 2024 and 2025. While some of this could be blamed on higher home prices, there remains a major portion that cannot be explained by price or transaction dynamics. Thus, it is quite likely that it reflects a reduced ability to buy homes without applying for a loan. This is also evidenced by the fact that the share of the population currently housed in a dwelling that was purchased with a mortgage loan grew steadily from a low of 0.5% in 2007, to 1.5% in 2024 (source: Eurostat). This could have been further boosted by the expected drop in interest rates as inflation seemed to be heading in the right direction. However, as of March 2026, this seems less likely, as the conflict in Iran would lead to another energy-led inflation event. Nonetheless, with real wages on the decline, mortgage loans will continue to be relied on for boosting home affordability.

Residential, non-residential and civil engineering forecasts up to 2027 can be found in the EECFA Romania Construction Forecast Report. Sample report and orders: https://eecfa.com/

Q4 2025: Weak Construction Activity-Start in Hungary

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The latest EBI Construction Activity Report has found that although the expansion of M1 motorway caused a considerable surge in the value of started construction projects in Q3 2025, Q4 brought very low Activity-Start. Even at current price, such a low number of construction projects did not start in a quarter in the past 9 years. However, thanks to the high numbers in Q3, annual Activity-Start only slightly sank against 2024. In total, projects worth nearly HUF 2,900 billion entered construction phase in 2025.

EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database). To obtain the report, please contact us.

Declining Activity-Start in building construction in Q4 2025

In Q4 2025, Activity-Start in building construction decreased significantly compared to previous quarters. However, due to the higher first quarter value, the full-year decline remained 10% compared to 2024, while the decrease was 8% over 2023.

Overall, construction works started in the segment last year were worth slightly less than HUF 2,000 billion, the lowest level between 2021 and 2025. Due to the significant increase in multi-unit residential construction in 2025 and the few construction starts in non-residential buildings, multi-unit residential construction accounted for almost half of building construction Activity-Start, which has not been the case since the first half of the 2000s.

Non-residential construction was characterized by a decline in Q4, and the value of started construction works was roughly at the same level as in Q2, which was also modest. For the year as a whole, non-residential Activity-Start was around HUF 1,000 billion, the lowest value in the period between 2018 and 2025. It also shows a 37.5% decline compared to 2024 at current price, and a 43% drop over 2023.

The largest non-residential projects entering construction phase in Q4 2025 included the construction of several logistics centres, such as CATL warehouse in Debrecen, Porsche Parts Center logistics-warehouse centre in Budaörs, and Building C of VGP Park Budapest Aerozone. Several hotel projects began, too, including the construction of Mama Shelter Hotel and Ruby Hotel in Budapest, and Danubius Hotel Annabella ***Superior in Balatonfüred.

M1 highway expansion boosting civil engineering Activity-Start in 2025

Following Q3 2025, which registered high Activity-Start due to the expansion of M1 motorway (M0-Concó rest area), Q4 2025 saw a very low value of started civil engineering works in Hungary. Few projects started not only in value, but also in number.

Thanks to the motorway project, annual figures tell a nicer story with projects starting in the value of nearly HUF 1,000 billion in 2025. It did not differ much from 2024, although the figures then were also boosted by the start of one large project, the construction of the Mohács Danube Bridge and related road network. Overall, in 2024-2025, apart from these two large projects, the value of civil engineering projects entering construction phase would have been very moderate. In Q4 2025 not a single project made it to the list of biggest started ones, indicating the reduction in civil engineering in that quarter.

Budapest continues to lead Activity-Start

Budapest had the highest share, 31%, within total Activity-Start in the last four quarters. Central Transdanubia also had a high proportion, more than 27%, primarily due to the M1 highway expansion. Together, more than 40% of works started in Central Hungary, 36.4% were related to Western Transdanubia, while the share of Eastern Hungary was 23%.

Sluggish multi-unit residential developer activity in Q4 2025

Q4 2025 saw another decrease in the value of started multi-unit residential constructions, with the cost value of started works falling below the level of Q2-Q3 2024, the second lowest value in the past two years.

However, 2025 overall was still a record year thanks to the high activity in the first 3 quarters of the year. Works worth nearly HUF 1,000 billion started, exceeding the Activity-Start of the previous year by 60% even at current price. At constant price, it was roughly equivalent to the record holder years of 2017-2018.

2026 may also register strong multi-unit residential construction as last year’s preliminary data shows surge in building permits. Further boost may come from the Otthon Start Program which was launched in September 2025 (subsidy helping first-time homebuyers secure up to HUF 50 million in mortgage financing with a fixed 3% interest rate and a maximum 25-year term) and the Capital Program, which was also started last year. In connection with the former, the construction of several thousand units has been announced in priority projects, and applications for several thousand more may be given green light. Since sales deadlines must also be met in priority projects, their start is expected soon with many construction works beginning this year.

The weaker project start in recent years was also visible in the Activity-Completion indicator in 2025. Multi-unit homes worth a total of HUF 370 billion were completed last year, roughly 8% below the 2024 value.

Regionally, in the past 4 quarters, most multi-unit residential Activity-Start was related to Budapest with 68% of works starting here in 2025. Central Hungary, including the capital city, accounted for 70%. 16% of works started in Western Hungary and 14% in Eastern Hungary.

Moderate wholesale and retail Activity-Start in Q4 2025

The last time an outstanding Activity-Start was registered in wholesale and retail was in 2017 and 2021-2022. In 2017 the start of construction of Etele Plaza contributed with the highest value, while in 2022 two big project starts played a major role in higher numbers (ActiCity Event Center in Veszprém and Phase II of Zenit Corso shopping centre in Zugló).

2025 brought a rather modest Activity-Start in wholesale and retail, works started by a 27% lower value than in 2024. The decline compared to 2023 was also 16%, roughly at the level of 2020, and the shrinkage compared to the peak years (2017 and 2021-2022) was 39-50%. Despite the drop, larger projects began last year, such as OBI DIY store and Drive-in in Kistarcsa and Stop Shop in Salgótarján.

In 2025, a total of HUF 71 billion worth of wholesale and retail properties were completed, the same as in 2024, for example, the shopping court in Táncsics Mihály Street in Komárom, Phase I of Time Out Market in Budapest, Mömax home improvement store in Székesfehérvár, and Spar store and Dera Park shopping park in Szentendre.

Original article: Tünde Tancsics (ELTINGA); English version: Eszter Falucskai (Buildecon)

Slovenia’s housing squeeze no one can measure

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Written by Dr Aleš Pustovrh – Bogatin, EECFA Slovenia

Slovenia’s housing market is in a curious state. Prices for both new and existing homes keep rising, yet the country still lacks a reliable measure of how far supply trails demand. Official data show steady appreciation across all major cities—Ljubljana most of all—while construction remains hampered by slow permitting, high input costs and a fragmented building industry. Politicians promise a surge in public and affordable housing but estimates of the true shortfall—whether based on household formation, demographics or unmet rental demand—are patchy and inconsistent. The average price per square metre has jumped by roughly 50% since 2021, but the structural imbalance behind this surge is harder to pin down, leaving policymakers to grapple with a problem they can only describe vaguely.

Ljubljana, Slovenia. Photo by Alexander Nadrilyanski on pexels.com

With a general election looming in March 2026, the absence of clear data creates fertile ground for confusion and political spin. The ruling coalition boasts of raising annual public‑housing investment to €100mn, pledging €1bn over the next decade. The public housing fund plans around 2,000 new units in the coming years, with perhaps 1,000 more from other public bodies. Private developers, especially in Ljubljana, are building briskly, too. Given that Slovenia completes about 5,000 homes a year, these additions ought to shift the market—at least in theory.

But the scale of need remains uncertain. In 2021 Slovenia counted 864,300 dwellings for 859,782 households—roughly one per household. Prices, though rising fast, remain below those in some neighbouring countries. The median price of used homes was €3,070 per square metre (nearly €5,000 in Ljubljana), while the average gross monthly wage was €2,500—yielding a price‑to‑income ratio lower than in many EU states. Mortgage credit is widely available and relatively cheap, with interest rates well below 4%. Outstanding housing loans rose from €8.5bn to more than €9bn in 2025, suggesting that many households are managing their residential construction investments without state support.

One of the outgoing government’s flagship measures—a clampdown on short‑term rentals—was meant to push more homes into the long‑term market. It may instead swell the ranks of empty properties: around 19% of dwellings already stand vacant. A straightforward remedy, a property tax to nudge owners to rent out unused homes, was avoided for fear of angering voters in a country where 75% of households own their homes.

The lack of solid data allows politicians to champion measures unlikely to achieve their stated aims, while sidestepping those that might work but would prove unpopular. Election season is rarely conducive to sober policymaking, but the next government will need better data—and the courage to act on it—if it hopes to make any meaningful dent in Slovenia’s housing woes.

More on Slovenia’s housing market and housing forecast up to 2027 can be found in the EECFA Slovenia Construction Forecast Report. Sample report and orders: https://eecfa.com/

EECFA 2025 Winter Construction Forecast

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EECFA released its 2025 Winter construction forecast on 12 December. Check out a sample report and place your order on eecfa.com. For discount, please contact us.

Southeast European construction markets

“Bulgaria’s total construction output is forecasted to increase by 3% on average for 2026-2027” – says Yasen Georgiev at Economic Policy Institute (EPI), EECFA’s Bulgarian research institute. He adds that this is to follow estimates for a similar performance of almost 3% in 2025. The sectoral background, however, shows, a nuanced picture – cooling of residential construction, positive news from non-residential and a robust performance of civil engineering. The latter will benefit from investments which will be backed by the absorption of EU funds through the Recovery and Resilience Plan (RRP) and classical operational programmes, both with implementation deadlines in 2026 and 2027. At the same time, Bulgaria’s economy is to expand by 2.4% on average in 2026-2027 – a period continuously shaped also by the Euro adoption on 1 January 2026.

Michael Glazer (SEE Regional Advisors) and Tatjana Halapija (Nada Projekt), EECFA’s Croatian members, think that declining dwelling sales in Croatia have, paradoxically, failed to stop the growth in the value of Croatian residential output, because increases in the price per square meter of those dwellings that do get sold have more than compensated for the lower number of square meters bought. “But how long this can continue is unclear” – they add. “The policies that the Croatian government is implementing in order to ease the country’s housing crisis are confusing the residential picture still more, since a number of those policies have contradictory effects on output. As to non-residential building construction, output growth during the period covered by the current forecast will depend greatly on the sector, with some likely to continue to benefit from catch-up growth and EU support for a bit longer and others moving toward a steady state or even a decline. In civil engineering, EU funds continue to play the dominant role in financing construction of all sorts. Sports facility construction is experiencing a boom, but given the speed with which such projects are completed, the effect on output will be relatively brief. Renewable energy construction should be growing rapidly, but regulators’ hostility toward the sector are holding it back.”

“Romania’s economy is entering a challenging period as the recently implemented measures to reduce the national account deficit begin to take effect” – reports Dr. Sebastian Sipos-Gug, EECFA’s Romanian researcher at Ebuild. “While most forecasters do not anticipate a recession, economic growth is expected to remain subdued over the next two years. Inflation is the highest in the EU, boosted in 2025 by increases in sales taxes. As a result, consumer prices are rising at a pace that is forecasted to outstrip wage growth, leading to a decline in real incomes in both 2025 and 2026. Government spending is also facing cuts, thus both private and public consumption are predicted to decline, with a chilling effect on most construction activity types. There is also the challenge of the massive level of public investment required by civil engineering projects that have started since 2023, which will be difficult to sustain under the austerity and the mounting pressure of losing even more EU funding. On the brighter side, both the economy at large and the labour market are expected to be quite resilient. By 2027, assuming the deficit reaches manageable levels, the effects of contractionary policies should fade out, inflation could ease, and interest rates could come down. This means that demand for construction would rebound and with it, construction activity.”

Dejan Krajinović, EECFA’s Serbian researcher (Beobuild) says that “Serbia’s overall construction output sank into a negative territory in 2025, primarily owing to the weaker performance in civil engineering. This year recorded growth in building construction, but the substantial consolidation in civil engineering dragged totals in red. The completion of major road, railway and energy projects contributed mostly, but delayed construction starts played a role as well. Residential construction is stable and is on historical levels, while non-residential construction is booming led by the hosting of the EXPO 2027 in Belgrade. Investments into commercial, hotel and office buildings are all spurred by the event, with the purposely built EXPO 2027 complex consisting of numerous venues being the single largest investment in non-residential. Improving financial conditions and sustained demand still support relatively high construction activity, but a lot of global political and economic uncertainties are dimming future prospects.”

Dr. Aleš Pustovrh at Bogatin, EECFA Slovenia, says that Slovenia’s construction sector is holding steady at EUR 6bn, though growth has cooled. Residential buildings remain the anchor, with output expected to show only a slight dip in 2025, helped by strong employment, rising wages and cheaper mortgages. Property transactions rebounded in early 2025, reversing last year’s slump, while prices continue to climb amid land shortages and slow permitting. Public housing programmes are ambitious, but private developers are concentrating on Ljubljana and coastal towns. Non-residential construction is mixed: offices are recovering slowly, retail stays subdued, but industrial and warehousing thrive on export demand and automation while health and education remain at very high levels. Civil engineering and public works lean on EU-backed projects and are anticipated to reach historically high levels by 2026. 

Eastern European construction markets

Andrey Vakulenko at Macon, EECFA’s Russian research institute notes that “the high key rate and the overall economic slowdown are constraining the Russian construction industry with negative trends expected for the current year and over the next two years. An easing of monetary policy, which has already begun, could help normalize the situation, but a positive effect is not expected until 2027. The main drag on construction output will likely be the residential subsector where high rates and revised government demand support principles are reducing activity among both buyers and developers. Negative trends will also likely persist in most non-residential segments due to declining growth rates of budget financing, a general decrease in business activity and a slowdown in consumption. The overall descending dynamics in the construction market may somewhat be mitigated by stable growth in civil engineering driven by export projects in energy and transport, but this growth is not predicted to be enough to keep the construction market in a positive zone”.

Prof. Ali Türel, EECFA’s Turkish researcher, reports that “the major effect of inflation-curb policies in Türkiye is the decline in disposable income and in the purchasing power of wage earners and pensioners. The moderate to lower-income population is unlikely to save enough equity for buying a home when rents have also become unaffordable for many. Ironically, housing sales have been increasing at a much higher rate than the growth of households. This can be attributed to the typical trend in Türkiye, where, during inflation, people expect a higher real return on their financial assets from real estate investments compared to alternative investment options. The reconstruction of earthquake-damaged buildings and infrastructure also contributed to the high rate of growth in building starts and completions from Q2 2025 onward, leading to the highest rates of change in the construction sector’s contribution to GDP compared to other sectors. Our latest forecast indicates that total construction output in Türkiye may reach 6.4 trillion TL in 2027 (EUR 180 billion), all at 2024 prices.”

According to Prof. Sergii Zapototskyi of Uvecon, EECFA Ukraine, despite the war and high risks, Ukraine’s construction industry remains one of the key drivers of economic recovery in 2025. The RDNA4 (the latest Rapid Damage and Needs Assessment Report) estimates Ukraine’s reconstruction needs for the next decade to be USD 486-524 billion, creating long-term demand for residential, non-residential and civil engineering construction works. Major challenges persist, including the uncertainty regarding the duration of the war, especially in frontline regions, labour shortages, bureaucratic barriers in the urban planning legislation, and logistical constraints due to the relocation of production facilities, and often, shortages in building materials. At the same time, the industry is demonstrating resilience: developers are diversifying supply chains, stabilizing procurement schedules, and increasing activity in the Central and Western regions. Demand for housing, intensive infrastructure restoration, and international investment from the EBRD, EIB, and other partners continue to support positive dynamics. The sector’s development prospects for 2026-2027 will largely depend on the security situation and the effectiveness of state recovery programs.

M1 motorway boosting Activity-Start in Hungarian construction

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The latest EBI Construction Activity Report Hungary has found that it was mainly due to the ongoing M1 motorway expansion that the value of started construction projects rose significantly in the third quarter of this year. The value of projects entering construction in July-September 2025 exceeded HUF 1,000 billion at current price – the second highest level in the past ten years. Without this motorway expansion, accounting for around 60% of Activity-Start, the figures would have been much more modest, though.

EBI Construction Activity Report Hungary analyses the construction industry on a quarterly basis, including the volume of newly started construction works and the value of projects completed in each quarter in aggregate and by segment as well. It is prepared by Eltinga, Buildecon (creation of indicators and development of algorithms for aggregation) and iBuild (project research and project database).

Building Construction Activity-Start

In Q3 2025 the value of started building construction projects was HUF 400 billion, around the same value as between April and June. Thanks to the outstanding figures between January and March, the value of building construction projects entering construction phase exceeded HUF 1,500 billion, only 4 points short of the same period in 2023 and 2024. At constant price, Activity-Start between January and September of this year was the lowest in the past 9 years.

Activity-Start of EBI Construction Activity Report in multi-unit housing construction, although greatly sank, stayed at a high level, with the total value of projects started in Q3 2025 exceeding HUF 170 billion. The situation was the opposite in non-residential construction. The segment recovered somewhat between July and September from the previous quarter’s low point, but projects still entered construction at a low value: Activity-Start was around HUF 230 billion. Since 2017 non-residential construction projects haven’t started at a lower value than in the first 9 months of this year.

The largest non-residential projects entering construction in Q3 2025 included MCC’s talent centre in Miskolc, BYD’s electric bus assembly plant in Komárom, Panattoni Logistics Park Building A in Mosonmagyaróvár, IGPark automotive parts manufacturing hall in Nyíregyháza, Phase 2 of Weerts Ebes logistics centre, and MVM Neuron headquarters office building in the 3rd district of Budapest.

Civil engineering Activity-Start

Civil Engineering Activity-Start of EBI Construction Activity Report registered a surge in Q3 2025 due to M1 motorway expansion (M0-Concó rest area). Outside road construction, the value of construction projects started in other civil engineering segments was moderate. While total Civil Engineering Activity-Start exceeded HUF 760 billion, the value of non-road and railway projects started was only around HUF 50 billion in Q3. In addition to the two phases of M1 motorway expansion, only Phase 7 of the closure of the Gyöngyösoroszi ore mine could make it to the list of the biggest started civil engineering projects.

Budapest on top among regions

In the past four quarters, the highest value of construction projects in Hungary started in Budapest and its share in total Activity-Start was 28%. Central Transdanubia also had a large share of 23%. 39% of projects started in Western Hungary, 38% in Central Hungary, while Eastern Hungary’s share was 23%.

Still high multi-unit housing Activity-Start

Although Q3 2025 was the second consecutive year to see a significant drop in the value of started multi-unit housing construction works, Activity-Start stayed high, far exceeding the average of recent years. At current price, multi-unit housing construction works started at an over HUF 170 billion, the fourth highest value after the first two quarters of 2025 and the last quarter of 2024. Overall, the successful first 9 months of this year brought a huge jump in multi-unit housing Activity-Start at current price, but it was also outstanding at constant price, only surpassed by the same period in 2017 in the last 10 years.

Multi-unit housing construction is likely to remain strong. There was a high number of building permits issued in the first three quarters of this year, meaning plenty of projects to get started. In Q3 2025 permitting was boosted by the preferential loan program dubbed Otthon Start available since September which could continue to have a positive impact on the number of homes under construction.

In Q3 this year, multi-unit homes worth around HUF 80 billion were completed at current price, while in the first 9 months, multi-unit housing Activity-Completion was well over HUF 200 billion, only slightly lower than in the same period in 2023-2024.

Looking at the past 4 quarters, Budapest continued to have a major share in multi-unit constructions entering construction (73%). Central Hungary had a 76%, while Western Hungary and Eastern Hungary had a share of 12% each.

Still weak Activity-Start in industrial buildings and warehouses

Industrial buildings and warehouses thrived between 2022 and 2024 when construction works worth between HUF 700 billion and 1,000 billion started annually. For example, construction started on several BMW plants around Debrecen, on Mercedes-Benz projects in Kecskemét, and on several battery factories. This year has seen a decline so far and the value of projects started during three months in Q2-Q3 2025 has been the lowest since 2021. Overall, in the first 9 months of 2025, Activity-Start in industrial buildings and warehouses was around HUF 400 billion, 37% lower than in the same period of 2024, and 29%-39% lower than the 2022-2023 values. Trends are similar at constant price: the period of 2021-2023 was exceptionally good for industrial buildings and warehouses, while there was a strong decline in 2025. In the last 10 years, Activity-Start at constant price in the first 9 months has not been so low as now.

The biggest projects started between January and September 2025 were CTP’s logistics halls in Biatorbágy and Vecsés, HelloParks’ logistics hall in Fót and BYD’s projects in Szeged and Komárom. Construction of Phase 1 of Halms automotive parts manufacturing plant in Miskolc and Panattoni Logistics Park Building A in Mosonmagyaróvár also started.

Activity-Completion was relatively high in all three quarters of 2025 as several projects that started in 2022-2024 reached completion. The value of projects completed since the beginning of 2025 neared HUF 700 billion. For example, this year saw the completion of CATL warehouse and metalworking plant in Debrecen and its surroundings, two BMW factories, and the hangar complex of the Helicopter Base in Szolnok. And Activity-Completion may also remain high in the last quarter of this year.

Original article: Tünde Tancsics (ELTINGA); English version: Eszter Falucskai (Buildecon)

Housing needs of internally displaced persons in Ukraine

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Written by Sergii Zapototskyi – UVECON, EECFA Ukraine

The full-scale invasion of Russia caused a deep humanitarian crisis and exacerbated socio-economic disparities in Ukraine. One of the key challenges is to provide homes for internally displaced persons (IDPs). The mass movement of the population created a shortage of affordable and temporary housing as the infrastructure was not ready for such a load. The government is already working on a new housing policy, which might also help resolve the issue of housing for IDPs.

Source: https://www.ioc.gov.ua/analytics/dashboard-vpo

Statistics on internally displaced persons

As of 1 November, this year, 4,588,045 internally displaced persons were officially registered in Ukraine, including 838,436 children under the age of 18 [1]. Most IDPS are in Kharkiv region (508 thousand or 11%), followed by Dnipropetrovsk region (467 thousand or 10%), the city of Kyiv (430 thousand or 9.4%) and Kyiv region (232 thousand or 5%). [3]. IDPs in these regions total about 1.6 million people [1]. As per the result of the 16th round of the survey conducted by The International Organization for Migration (IOM, UN Migration), as of April 2024, about 2.7 million internally displaced people were from frontline areas.

Housing damages, needs and solutions

In total, more than 1.3 million Ukrainian households lost their homes because of the war, including not only IDPs, but also residents of settlements that suffered extensive destruction. The World Bank estimates total housing needs in Ukraine between 2025 and 2035 to be USD 86 billion, mostly to finance repair and reconstruction works of the housing stock (estimated at USD 75.5 billion including the cost of clearing rubble at USD 5.7 billion). USD 404.6 million should go to acute housing needs and funding has also been identified for organizational measures (USD 37.5 million) and regulatory and technical processes, including the development of strategies (USD 12.5 million) to coordinate and implement reconstruction programs [4].

Citizens have already submitted over 850,000 reports of housing damage through the Diia app (the national public-services portal) totalling over 60 million sqm of losses. For comparison, in the pre-war period, an average of 9-10 million sqm of homes were completed in Ukraine each year, demonstrating the scale of challenge and need for multi-level solutions in housing policy. Preferential lending programs are unable to solve this situation and cover the housing needs. The ‘jeOselia’ program provided loans worth over UAH 28 billion, but 52% of this went to military personnel, while IDPs received only 566 pieces of loans. In 2024, within the framework of this 3% mortgage program, only 500 families were provided with housing. The situation is even more critical in the rental market as the state program for subsidizing rental housing has shown low efficiency. The majority of IDPs (90-95%) rent homes unofficially, making them vulnerable to unreliable living conditions and unjustified rental charge increases or evictions.

Modular settlement, Borodianka. Photo: Sergii Zapototskyi

Modular settlements are a key temporary housing for IDPs, although living conditions here cannot be considered fully comfortable. Initially, they were meant to be short-term but gradually became long-term housing for many families due to their limited finances. Today, besides the psychological difficulties and discomfort of residents, operating such facilities is also a major challenge. The maintenance of modular settlements, including payment for utilities, repairs and security, falls entirely on local budgets, an additional financial burden for communities which often do not have enough resources to sustainably finance these.

Modular settlement, Bucha. Photo: Sergii Zapototskyi

Housing policy changes

As the problem of providing housing for IDPs is systemic in nature and cannot be solved solely through financial instruments, a comprehensive review of state housing policy has become necessary, particularly the development of an affordable rental housing segment, social programs, and long-term support mechanisms for both IDPs and vulnerable categories of the population in general.

The Ukrainian Parliament is already working on several key legislative initiatives. The central one is draft law No. 12377 ‘On the Basic Principles of Housing Policy’ to replace the current Housing Code from 1983 which does not contain basic concepts for modern housing policy such as social rental housing or housing stock of communal ownership. Draft law No. 4080 is also important on the inventory of the housing stock. In parallel with drafting these laws, necessary by-laws are being prepared to regulate the practical mechanisms for implementing housing policy (creation and maintenance of housing queues, criteria for selecting recipients of state support, and the procedure of providing various forms of housing assistance). In addition, the government’s plans until 2027 include allocating EUR 650 million to the eRecovery Program, EUR 450 million to support IDPs, military personnel and the families of the deceased, creating a social housing fund and introducing a unified state online system for the long-term strategy of social integration and support for vulnerable categories of the population. All this might help resolve housing for IDPs.

Sources:

  1. Internally Displaced Persons. State Enterprise “Information and Computing Center of the Ministry of Social Policy, Family and Unity of Ukraine”: https://www.ioc.gov.ua/analytics/dashboard-vpo
  2. Housing crisis in Ukraine: how to provide IDPs with housing in 2025? International Renaissance Foundation: https://www.irf.ua/zhytlova-kryza-v-ukrayini-yak-zabezpechyty-vpo-zhytlom-u-2025-roczi/
  3. Internal Displacement Report, IOM Ukraine: https://dtm.iom.int/sites/g/files/tmzbdl1461/files/reports/IOM_UKR_GPS_Internal%20Displacement%20Report_Round%2016_UA_June%202024.pdf
  4. Rapid Assessment of Damage and Recovery Needs RDNA4, World Bank Group: https://documents1.worldbank.org/curated/en/099052925103531065/pdf/P180174-93c8e8c1-83a2-487d-aaec-a8435f9db418.pdf  
  5. Cedos, Housing and Residential Conditions in Ukraine: Survey Results, 2024: https://cedos.org.ua/wp-content/uploads/zhytlo-ta-zhytlovi-umovy-ukrayin_ok_rezultaty-opytuvannya.pdf

More on the Ukrainian housing market and forecast for the segment, as well as the rest of the construction market will be in our Winter Forecast Report Ukraine to be out on 12 December, along with our other 7 country reports. To obtain it and check a sample report: https://eecfa.com/

Aparthotels: new growth spot for non-residential construction in Russia

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Written by Andrey Vakulenko – MACON, EECFA Russia

Russia’s resort real estate market has seen a dynamic growth in recent years, partly due to the emergence of aparthotels – a format attractive to both developers and hotel operators. The coming years are also expected to see a sharp increase in aparthotel construction, supporting the non-residential construction market – according to Andrey Vakulenko, EECFA’s Russian analyst.

Thriving aparthotel segment

Resort real estate has been one of the fastest-growing segments of the Russian construction market in recent years. Aparthotels – apartment complexes with minimal infrastructure and services, and with the mandatory availability of a trust management – have particularly seen a rapid growth, though they are relatively new to the Russian market. The core of the supply is (and will be) resort projects, i.e. aparthotels in locations with developed recreational and tourist infrastructure for seasonal vacations. Urban aparthotels – primarily in metropolitan areas with minimal infrastructure – are rather aimed at business travelers and to a lesser extent at traditional tourism and long-term rentals.

As of Q3 2025, the aparthotel market size stood at 25,200 units with a total area of ​​612,500 sqm and by the end of this year, roughly 143,000 sqm of new aparthotels, or 4,300 new units are expected to open. Based on the announced plans, the next three to four years will register a sharp rise, and by the end of 2029 aparthotels may amount to around 109,800 units with over 3.6 million sqm, almost six times higher than the current level.

Behind the growth

One of the main reasons for the anticipated expansion of the aparthotel format is that domestic tourism gained popularity after 2022 due to the reduced accessibility of many international resorts (because of the suspension of air travel, the weak ruble, visa issues, and other internal or external restrictions). Rise in domestic tourism created stable high demand for accommodation in virtually all key resorts in Russia.

Another reason is that developers specialized in multi-unit residential construction began to start many projects in aparthotel and resort real estate construction amid the decline in the residential real estate market following the cancellation of the mass preferential mortgage program.

Also, there are significant incentives and state support for developing tourism infrastructure and the domestic tourism industry, including the construction of hotel complexes and aparthotels.

Furthermore, in 2024 the status of aparthotels was legalized; they were included in the official hotel classification system, creating uniform standards for the segment and transparent conditions for market participants.

Besides, the departure of many large foreign hotel operators from the market in 2022 led to the expansion of Russian hotel chains (Azimut Hotels, Cosmos Hotel Group, Alean Collection, ZONT Hotel Group, VALO Hotel Services, Mantera Group, among others), which began collaborating with aparthotels, increasing the latter’s attractiveness and guaranteeing a high level of service and trust management services.

Moreover, many investors appeared in the market who found the trust management model used in aparthotels and the opportunity of generating passive income attractive. The operating return on investments in aparthotels in developed resorts managed by well-known hotel brands can reach 7%-10% and higher. And given the rise in the market value of apartments, long-term returns can reach 13%-17% per annum, exceeding the return on long-term bank deposits (currently 8%-10% per year for a three-year deposit).

All this suggests that aparthotels will be a major segment of non-residential construction in the coming years.

Coastal regions: top locations for aparthotels

The aparthotel format is developing most actively on the Black Sea coast, currently accounting for over half of the total supply in this segment. Urban aparthotels are primarily in Moscow and St. Petersburg with just over one-fifth of the total supply.

In the coming years, it is also the Black Sea coast that will likely register the biggest expansion in supply, but new aparthotels are also set to be actively emerging on the Caspian Sea coast, in Dagestan.

In coastal regions (Krasnodar Krai, Crimea, Dagestan), aparthotels under construction already amount to more than a quarter of all multi-unit residential real estate under construction and this figure is expected to grow further.

There is also an increase in the construction of similar projects in other resorts across the country, for example, on the Baltic coast or at mountain and spa resorts in the North Caucasus, the Altai Mountains and the Urals, among others.

For more information and forecast for non-residential construction and the rest of the Russian construction market, consult our current report or the next report scheduled to be out on 12 December.