Hungary Property Market Update 2016

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Hungary Property Market Update 2016

April 22, 2016

 If you are planning to sell your property in Hungary, you’ll probably want to read this article first, just to have an idea of how things are in the Hungarian property market. Things are moving in the right direction in Hungary, which is a relief, given how bad the situation was in the aftermath of the 2008 recession.

The Hungarian government actively encourages people to buy properties. For many Hungarians, buying a house is the safest investment possible. Most prefer to invest their money in real estate than to park their savings in banks as the interest rates on bank deposits are really quite low. Also, with rental prices in Hungary on the high side, it really makes sense for Hungarians to invest in multiple homes.

However, most Hungarians had simply given up on the idea of buying a house in the country in the period from 2008 to 2013. Home sales were down by over 50%. Most people decided not to enter the property market and many put off their decision to buy their first home, because of the turbulence in the national economy.

It was in 2014 that things first began to change. People started buying once again. Economy took a turn for the better and soon enough, there was a new interest in Hungary. This new wave of confidence continued into 2015, which saw a jump of 40% in property sales in the country.  2016 has been a great year so far and things are certainly looking good.

Budapest, the capital of Hungary has seen the most impressive gains. Home prices here have risen by 20 percent in 2015, which is much faster than any city in Europe. Still, an apartment in Budapest costs a fraction of what a comparable property would cost in say, London or Paris.

A typical apartment in the best areas of Budapest costs EUR 200,000, which is much less in comparison to the apartment prices in London, Madrid or Paris. The low cost of living in Hungary has certainly been one of the factors that has led many foreign buyers to consider getting a home here.

Hungary is a beautiful country with a vibrant culture and a proud history. Today, there is a growing recognition about Hungary and what it has to offer. There is a lot of curiosity about Hungary not just among tourists, but also among international investors and property hunters.

Investors like the fact that the rental incomes in Hungary are very high. Buying a house here and converting it into a rental property makes a lot of sense as rental yields in Hungary are very high, ranging from 7% to 12%.

Most international property hunters give a lot of importance to the stability of a country before investing in it. Hungary has a very stable economy and is an open, free market democracy.

While it is by no means the fastest growing economy in the world, it has been growing steadily for many years now, without really experiencing too many shocks, except during a brief period following the 2008 recession, which we talked about earlier in the article.

Most foreign investors interested in Hungary prefer to buy apartments in Budapest, which, despite its low cost of living, has everything you would expect from a world class city.

Of the foreign buyers interested in Hungary, an overwhelming majority are from Russia or Ukraine, followed by investors from China. There is a lot of interest coming from Britain, Sweden, Australia, Norway, Germany and Italy as well.

Many non-EU investors are attracted by Hungary’s Golden Visa scheme. Hungary offers permanent residency permits to anyone who makes a minimum bond purchase of €250,000 in the country. This is the fastest way to become a permanent resident of a European country.