A European city near Romania famous for its thermal baths, vibrant nightlife and historic buildings will completely ban short-term rentals in one of its most popular tourist districts. The measure will come into effect on January 1, 2026 and aims to reduce overcrowding and protect housing for residents.
Budapest, one of Europe’s most popular city-break destinations is to completely ban short-term tourist rentals in District VI, also known as Terézváros or “Budapest Broadway”, according to dailymail.
The district, where about 8% of apartments were listed for short-term rentals, is home to some of the Hungarian capital’s best-known landmarks, such as Andrássy Avenue and the Hungarian State Opera House. Over the past year, this concentration of tourist housing has seen rents rise by more than 10%.
Budapest City Hall emphasizes that the ban will not affect hotels and that the decision was made after a public consultation in which the majority of residents voted in favor of it. The Supreme Court of Hungary confirmed the legality of the measure, which will have an estimated impact of approximately 750,000 euros per year.
Currently, around 40% of tourists visiting Budapest choose to stay in holiday homes, significantly higher than the European average of 28%.
Reactions from local residents are divided: some are happy that the town will retain its character and housing affordability, while others fear financial losses and reduced tourism.
The measure comes in a wider European context, where cities such as Amsterdam, Barcelona or Berlin have taken similar decisions to reduce pressure on the real estate market and prevent “over tourism”.
In Barcelona, for example, no new licenses will be granted for short-term rentals until 2028.
The European Commission has recognized the role of tourist rentals in the housing crisis and is considering legislative proposals to increase the availability of long-term housing.
