Foreign investors are disappearing from the Hungarian real estate market
Hungarian real estate is a good investment opportunity for foreign investors; nonetheless, foreign participation in Hungary’s real estate market dropped significantly in the last two years.
Budapest is still one of the cheapest capitals not only in the EU but also among OECD members. The average price of a newly built apartment is one million forints (~EUR 2786) per square metre. Therefore, investing in Hungarian properties can be profitable in the case of subsequent leasing or sale. According to Károly Benedikt, Head of Marketing & PR at Duna House Group, the average gross rental income is expected to be around 3.5−5.8% per year. This number can vary depending on the location and condition of the house.
Proportion of non-EU investors
Last year, more than 131,000 properties were sold in Hungary. However, foreign buyers outside the European Union submitted only 2,200 applications, mainly for apartments in Budapest. (Foreign investors who are not citizens of the European Union, the European Economic Area or Switzerland have to acquire an official government permit to be able to purchase any property.)
This means that the proportion of foreigners in the Hungarian real estate market was around 0.168% last year, which is a decrease of more than 40% compared to 2019.
This change occurred due to the coronavirus pandemic and the related international travel restrictions, writes Hvg. Nonetheless, the first signs of a declining trend have already been observed in 2019.
According to statistics published by the Prime Minister’s Office,
the majority, almost 40%, of foreign investors in the housing market were Chinese citizens,
writes Világgazdaság. Not only did they form one of the most prominent groups of foreign buyers, but they also concluded the contracts of the highest value.
The greatest demand has been observed in the case of apartments in the 13th, 10th, and 9th districts within Budapest.
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The proportion of investors from Israel and Russia was 8% in both cases. Ukrainian buyers were present in the Hungarian real estate market with a proportion of 5%.
Buyers from Israel most often opted for apartments in downtown Budapest. The majority of Russians settled in Hévíz, and our eastern neighbours mainly settled in Mosonmagyaróvár and Dunaújváros.
American, Turkish, Serbian, Algerian, Australian, Tunisian, and Venezuelan investors were also interested in Hungarian real estate.
Investors from the EU
As far as EU citizens are concerned, most of the buyers were German in both 2019 and 2020, and their most popular destinations were the capital and the holiday resorts on the shores of Lake Balaton,
explained Károly Benedikt. Although the number of investors from the neighbouring countries has dropped, potential buyers from Romania, Slovakia, and Austria still constituted a significant proportion of foreign investors. They typically chose lower-value properties in the areas close to the border.
Source: hvg.hu, vg.hu
4 Comments
Just a couple of says ago, we read an article claiming that Budapest real estate is going sky high. This article seems to say just the opposite.
What gives?
Having used this Forum on numerous past occassions – disagreeing with the presentation style and contents of articles, that talk up the property markets in Budapest, Hungary – this article – if it is – FACT – will have massive ramifications in the already grossly inflated prices that we witness in Budapest, Hungary in the Property Market – at this time.
The “inflated” bubble has to Burst.
The sustainability of the value of propertys in Budapest, Hungary – can’t Continue – can’t Economically be Sustained.
They are from another Planet.
Remember – it is a SELLERS Market.
It will remain for a considerable time – a SELLERS Market – as we still are witnessing completion of apartments and flats – not on the market for sale at different stages of there building.
We know there are plans to build greater numbers of flats and apartments using Kozvagohid as example – numbers of new apartments and flats in the initial stage of being built.
Hotels – further example of OVER supply – and more under construction and planed to build.
We know – in the past (10) years – under this present Fidesz Government – that has continues to embrace and support Foreign Investment into the Property Market in Budapest, Hungary – that the (3) main Foreign Investors have been ;
(1) – Chinese.
(2) – Vietnamese.
(3) – Germans.
If this article headline is FACT – the market values of Property in Budapest, Hungary will see possible a Cataclysmic collapse.
Previously shared in this forum, when you have the Property Market – Hotel Accomadation Markets – like is – FACT – in Budapest,Hungary at present – top heavy with SELLERS – dangerously out numbering Buyers – and lack of tourist numbers – that in normal times will not be in number – able to fill occupy – ALL the Hotels and places of rented accomodation available to them – this is Red Light – Alarm Bells – Economic serious times – we are in and face in the Future.
Buyers are still in existance but the lack of proceeding to purchase a property – a first home/apartment purchase which is a life time Investment – the YOUNG of our Hungarian Population – our FUTURE – this lack of Buyer interest is burdened bogged down – this lack of buyer interest and demand – principally – due to the FACT – that prices across the board in the Property Markets – have risen beyond a realistic leval – a perilous dangerous position – that far outweights – the viable financial positions of – in the thousands – of YOUNG Hungarins – there Financial Capabilities to purchase – and service the Debt of a Mortage – repayment levals – that would be required for them to purchase/invest in a property.
They – the YOUNG – in there thousands – have been forced out of the Property Market – principally by Foreign Investors and our current Government – Dismissing Badly – the NEED – of looking after the – YOUNG of Hungary – the direct DNA – the FUTURE – of young Hungarians and – allowing encourageing embracing – Foreign Investment – to be there Major Focus, Attention and Priority.
Remember – interest rates in Hungary – over the past say (3) three months – have been Increased.
Hungary – we are top or near top in the European Union Membership Countrys – in the leval of Interest Rates.
This – on top of over supply of Propertys on the Sale Market – which has not Apexed – the “claimed” as discussed in this article – disappearance of – Foreign Investors – further new/renovated propertys to be put into the market for Sale – this is a Freightening Economic situation – which in ALL probability – that we – Budapest, Hungary – will be CHALLENGED – and come out the “other side” – to find a leval of normality in the Property Market – that GIVES – makes available the opportunities for the YOUNG – the Future of Hungary – the “blood” of Hungarians – born and breed – enter into the Property Market – that to them – is a Lifetime Investment.
How often is the DNH going to reuse this old article? Readers are getting repetitive strain injuries from reading this tripe.
If you’re government is anything like the idiots that run the U.K. then they will introduce absurd systems to support high house prices. “Help to buy” etc.
We have suffered under these conditions for decades.
Spending all your money on a house leaves you little to spend in the wider economy. This is a very bad long term position but people ‘feel’ wealthy because of it, even if it’s pretend money that they can’t access until the sell and downsize or exit the market completely.
The entire thing becomes a pyramid of debt. Eventually those starting out will not be able to take on enough debt to support the prices and the foundation of the pyramid begins to crack.
Lord help those with high levels of debt when that happens. Inevitably it will be the young again. Those desperate to simply provide a roof over their own heads and taking on a lifetimes worth of debt for the privilege.
Scandalous.