This paper discusses the tangible effects of economic and cultural globalisation at the neighbourhood level in Budapest, Hungary. Rather than examining local/national economic and cultural traits, it considers the impacts of capital investments, architectural influences, immigrant groups and cultural changes in the residential space. The spatial distribution of these impacts in Budapest suggests that global processes not only steer neighbourhood development but that they do so differentially. That is, certain aspects of globalisation tend to appear in specific neighbourhoods, where they affect local development to different degrees. In Budapest, we find that a neighbourhood’s relative location, image and socio-economic characteristics are the factors that influence the outcome most. The analysis interprets the way globalisation affects local development from the perspective of critical realism, an approach combining various methodologies. To highlight the nature of the global-local interplay, the study is framed by a general model of neighbourhood transformation.