Residents of Budapest’s Sixth District, a neighborhood in Hungary have voted to ban short-term rentals in a referendum that concluded on September 15, potentially paving the way for stricter nationwide regulations on Airbnb-style accommodations.

The vote comes amid growing concerns over rising rents and housing shortages in the city center.

From Local Control to Total Ban

This move follows earlier legislative changes granting local governments the authority to restrict homestays to a limited number of days per year. However, limits of 60, 75, or 130 days proved difficult to enforce legally, prompting the district to ask residents directly whether Airbnb-style rentals should be banned altogether.

Turnout was low, with only 20% of eligible voters participating in the referendum, which began on September 2. The final tally showed 3,265 votes (54%) in favor of the ban, while 2,818 opposed it. Homeowners will have until January 2026 before the new regulation takes effect, providing them with a grace period to adjust.

Short-term rental properties account for about 8% of all homes in the Sixth District, which includes the popular Andrassy Avenue, a UNESCO World Heritage site. In some high-traffic areas, this proportion can reach up to 40%.

The Battle Over Budapest’s Rental Market

Over the past decade, the district has gained a reputation as Budapest's "party district," known for its vibrant nightlife, trendy bars, and unique "ruin pubs," which have become major attractions for budget travelers.

The referendum has sparked a wider debate about the future of short-term rentals in Budapest. Following the vote, Alexandra Szentkiralyi, head of the ruling Fidesz party’s Budapest chapter, announced her intention to recommend a nationwide ban on short-term rentals to the government.

Economic Fallout or Necessary Reform?

Supporters of the ban argue that it will help address rising rents and housing shortages, potentially stabilizing or even lowering rent prices in the city’s central districts. However, opponents warn of the potential negative economic impact, including a decline in tourism revenue and local government income.

Airbnb providers argue that the ban could drive tourists to alternative destinations like Prague or Kraków, hurting Budapest’s tourism sector. They also contend that some property owners might find loopholes, such as converting their properties into hostels, which would minimize the impact on the rental market and fail to address housing affordability issues.

According to real estate data from Duna House, average home prices per square meter in the Sixth District have dipped slightly since the referendum began, dropping from HUF 1.45 million (€3,680) to HUF 1.43 million. Meanwhile, monthly rental rates in central districts remain high, averaging HUF 350,000–400,000, far exceeding the net median wage.

What’s Next for Budapest?

As Budapest’s Sixth District takes a stand against short-term rentals, all eyes are now on whether the government will take similar action on a national level, setting a precedent that could reshape the city's housing landscape and its appeal as a tourist destination.