The ongoing invasion of Ukraine has had a significant effect on the Hungarian real estate market, especially in Budapest and the country spa towns. That is because the Russian and Ukrainian investors almost disappeared, so demand for luxury homes dwindled considerably.
According to Világgazdaság, Russian buyers disappeared from the Hungarian real estate market since the sanctions froze their bank accounts. As a result, they cannot access their savings. Furthermore, the majority of those who could enter the market and purchase does not receive an administrative licence.
Before the Russian invasion of Ukraine, Russian and Ukrainian nationals played an important role in the Hungarian tourism and real estate sector. More than half of the investing Russians bought apartments and houses in Budapest. Others acquired real estate in the famous Hungarian spa towns.
Meanwhile, approximately 25 percent of the Ukrainians invested in the Hungarian capital. The majority of them bought real estate in the country. Though Világgazdaság does not write it, we suppose they were mostly Hungarians living in Transcarpathia and moving to Hungary to escape from the repressive Ukrainian nationalism, the economic problems or flee from the war in Eastern Ukraine and the conscriptions going hand in hand with it. All these three factors were a sorrowful reality already before Putin’s invasion.
Based on a statement from ingatlan.com, neither Russians nor Ukrainians were a deciding group in the Hungarian real estate market. Their market share was around 5-6 percent. After the coronavirus pandemic, Russians were in 10th place on the list of foreign buyers.
Ákos Balla, the CEO of Balla Ingatlan, said that the Russians had disappeared from the market. The PR chairman of Duna House, Károly Benedikt, added that Russian nationals are in a difficult position. Their market share is around 3 percent among foreign buyers, which is very low.
That is partly because only 1/3rd of them receive an administrative licence to be able to buy real estate in Hungary. Furthermore, their accounts are frozen, so they cannot access their savings. Therefore, those who already have real estate in Hungary want to sell or make it profitable.
Világgazdaság says that those Russians who have money and receive the licence mostly want to buy luxury apartments. Meanwhile, members of the middle-class search for downtown apartments in Budapest, which are in a good state and have two rooms.