Things look good, as far as the Property Trends in Hungary 2016 are concerned. The housing market in the country is doing far better than it was in the aftermath of the global recession of 2008. In fact, 2008 to 2013 can be considered to be lost years as far as the real estate market in Hungary is concerned.
Most people had given up buying new properties between 2008 and 2018, and the volume of property transaction was down by as much as 50 percent. Property purchases related to events such as a marriage of the birth of a child, were put off because of the uncertainty in the Hungarian economy.
But things changed around 2014. People began buying houses yet again and by 2015 there was a new wave of confidence in the national economy. Indeed, 2015 saw a 40% increase in the number of property transactions in the country, which was quite exceptional.
Hungarians see property as the safest investment vehicle for their savings. Because of low interest rates in banks and high rental yields, investing in a rental home makes a lot of sense. There are a plenty of subsidies offered by the government to encourage the locals to buy more properties.
In Budapest, certain areas have seen house prices rise by an incredible 20% in 2015. Even so, house prices in Budapest are much lower than in the rest of Europe. A 100 sq metre apartment in the poshest areas of Budapest only costs 150,000 EUR, which is exceptionally cheap compared to London, Paris or Berlin.
Foreign investors are increasingly buying properties in Hungary, which has emerged as a great destination for overseas property hunters. In fact, the overseas property market is closely linked to tourism. Hungary is fast emerging as a tourist hub, as it is one of the most beautiful countries in Europe with a rich history and diverse culture. Over 15 million foreigners visited Hungary in 2015 as tourists, which is very impressive, given the small size of the country.
Many foreigners who visit Hungary can see the value of buying property in the country. Properties in Hungary offer an exceptional rental value with rental yields of 8% to 10%. Hungary is also a very stable country, with a solid economy and a free and open democracy. This makes properties in cities like Budapest very attractive to foreign investors who value stability more than anything else.
More than 50 percent of foreign nationals who are buying properties in Hungary are Russians and Chinese. Also buying properties in Hungary are wealthy individuals from Australia, Sweden, UK, Italy, Ukraine, United States, Egypt and Israel. Most foreigners buy properties in Budapest, which has all the amenities that you would expect from a world class city.
If you want a more detailed markup of the foreign buyers who purchase property in Budapest – over 50% of them are from Russia or Ukraine, 25% are from China. The rest are from Sweden, Norway, Australia, United Kingdom, Germany and Italy.
Purchasing property in Hungary is quite simple, even for foreign buyers and the regulations related to the purchase are uncomplicated. Quality of life for expats in Hungary is very good. As Andras Cornides, who works for the real estate company Tower, says, “People who don’t need to be near an office, like freelancers, can earn in western Europe and live here like a king. I have quite a few clients from the UK who are planning on retiring here.”
A number of cash rich Chinese investors use Hungary as a base to access the rest of the European Union. Hungary offers permanent residency for Chinese nationals for investing in the immigration bond programme which requires a minimum bond purchase of €250,000. This is the fastest way to get permanent residency of an EU nation and takes under 6 months, while in other EU nations, getting permanent residency can take up to 5 years.