real estate

New real estate market trend at Lake Balaton: tiny houses! – PHOTOS

tiny house hungary

More and more mini houses, commonly known as “tiny houses”, are appearing on plots of land on the shores of Lake Balaton. These small structures are legally considered vehicles, and they can even be ordered from China.

The new real estate trend: tiny houses

An increasing number of mini-houses, or “tiny houses”, are appearing on plots of land on the shores of Lake Balaton. This situation is prompting the authorities to ponder. These small structures are legally considered vehicles, they can even be ordered from China. The local contractor who specialises in them says the building authority cannot interfere with their installation, napi.hu reports.

Norbert Izrael, the owner of Pop Tiny House, burst into the business world in 2021 on his show Among the Sharks (Cápák között, the Hungarian version of Shark Tank in the US). Since then, he has increased his investment by HUF 40 million and launched the tiny house movement in Hungary, Szeretlek Magyarország writes.

According to Mr Izrael, he built his first mini house for himself, then started to build for others. He opened his factory first in Budapest and later in Vác, where he has 12 employees and is continuously producing houses. They are working on four tiny houses at a time.

How much do these tiny houses cost?

The entrepreneur warns everyone not to think that HUF 10 million can buy such a mini-cabin.

“Now, for example, we are making a double house for a young couple. They are going to live in it with two children, it will be in a small village near Győr. They didn’t have HUF 100 million, but they will spend HUF 50 million on land and a tiny house, and they will have a house with a floor area of 50 square metres, with a couple of 10 square metres of gallery,”

he says, outlining the financials.

How much times does it take to build one?

A custom tiny house can be completed in up to 6-9 months from order. However, the company has two model buildings, a 6.6-metre and a 7.7-metre one, which can be completed in around three months.

What is more, you can even order a tiny house from China online. For example, a 20-square-metre “Luxury” fantasy structure is advertised for HUF 7,300,000, with delivery in Hungary in 2.5 months.

Average Budapest apartment price rose by 50 percent

Hungary real estate market Budapest

The psychological price of apartments has increased from HUF 20 to 30 million (EUR 53,657.94-80,486.90) in a little over two and a half years. Otthon Centrum (OC) has examined what kind of apartment are available for purchase for this amount of money in the capital city.

The apartments offered at the HUF 30 million threshold are popular among young couples and people taking their first steps into home ownership. Due to the dramatic increased in square meter prices in recent years, there is a noticeable demand for properties of this value. According to data from OC, in autumn 2020, the psychological threshold used to be around HUF 20 million. Currently, it is drawing close to 30 million, writes Index.

End of price hike?

According to the latest market data, the pace of price increase has lost momentum. This can be primarily attributed to rising interest rates, the inflationary environment and a decrease in purchasing power. As a result, many potential buyers are waiting, hoping for significant price reductions. There is indeed a noticeable drop in prices for family houses. However, in the case of apartments, it is only the rate of increase that is slowing.

The high inflation and deteriorating interest rates had the least impact on the prices of used brick apartments. The current price per square meter of HUF 1,017,000 (EUR 2,728.63) is 5 percent higher than the prices in the fourth quarter of 2022.

In contrast, the rise in price per square meter for panel apartments has essentially halted in the capital city. The current average value is HUF 747,000 (EUR 2,004.22), which is only 0.6 percent higher than in the previous quarter.

Only the average price per square meter for family houses has plummeted in the capital city, however by a significant rate. The average value of HUF 603,000 (EUR 1,617.86) is 18 percent lower than the average cost per square meter in the fourth quarter of last year. This represents a massive price advantage of several million forints for buyers in this segment.

What’s available out there?

It is important to note that there are striking price differences between districts. We can observe prominent differences in terms of apartment size available for thirty million forints.

With this budget in the 3rd district, one could find a 40 square meter apartment, while in the 11th district, it would be limited to 35 square meters. The same trend persists on the Pest side, where in the popular 13th district, this sum would be sufficient for a 35 square meter apartment, while in the 14th district, it would accommodate a 37 square meter apartment. In the outer suburbs of Pest, however, at least a 40 square meter, one and a half-room apartment can be purchased, and in Csepel, a 56 square meter, two and a half-room apartment can be obtained for 30 million forints.

It is virtually impossible to find a family house available for 30 million forints. Considering the average price per square meter, one could potentially purchase a 50 square meter house with this budget. However, there is a scarcity of such small family houses in the market.

If there is any available, in the 3rd district it would only be sufficient for a mere 35 square meter house, and in the outer 16th district, it would accommodate a 45 square meter house, based on the average price per square meter in those districts. However, with a bit of luck and persistent searching, it is not impossible to find a 55 square meter, two-bedroom house for this price in the 20th and 23rd districts.

Rental market: This is the most expensive Budapest district

budapest property market airbnb rental real estate

According to KSH-ingatlan.com’s rent index, rents rose by 0.7 percent in April nationwide and by 1.7 percent in the capital. Meanwhile, rents increased by 17 percent in Hungary and 19 percent in Budapest over the year, the real estate market portal said. So far, the most expensive district in the Hungarian capital has been District 5. However, this has changed, and another district has taken the lead. We will also show you the cheapest districts in Budapest.

People would rather rent than buy

László Balogh, chief economic expert at ingatlan.com, said that so far this year, compared to last year, interest in apartments for sale has fallen by 44 percent. At the same time, the number of apartments for rent has decreased by 22 percent. The number of searches for residential properties for sale fell by 18 percent, while the number of searches for rentals increased by 11 percent, napi.hu reports.

Significant rise in rents over the past year

Supply data for mid-May also point to a buoyant rental market. According to ingatlan.com, the average rent in Budapest was HUF 225,000 (EUR 600), compared to HUF 220,000 (EUR 587.64) a month earlier and HUF 180,000 (EUR 480.79) a year earlier.

The most expensive and the cheapest Budapest districts

In the districts of Budapest, apartments were advertised for rent for an average of HUF 245,000 (EUR 654.35) in District 13, HUF 230,000 (EUR 614.29) in District 11 and HUF 330,000 (EUR 881.37) in District 2. The latter district took over the title of the most expensive district from District V, where the average rent was HUF 324,000 (EUR 865.45) in mid-May. The cheapest districts of Budapest are District 17, 19 and 23. In these places, apartments were offered for rent for an average of HUF 138-147,000 (EUR 368.62-392.66).

Rental market in the county seats

Veszprém tops the list of the most expensive county seats with HUF 165,000 (EUR 440.74), followed by Szombathely with HUF 155,000 (EUR 414), then Debrecen, Székesfehérvár, Győr and Tatabánya with HUF 150,000 (EUR 400.67) each. Among the county seats, Szekszárd, Kaposvár, Miskolc, Békéscsaba and Salgótarján are the cheapest. The average rents in these cities range between HUF 90,000 (EUR 240.41) and HUF 110,000 (EUR 293.84) in mid-May, the statement said.

Budapest has the highest share of high-cost housing in the world

budapest real estate

The inequality in housing is a dilemma faced by countries all over the world. But which global city can you find the highest concentration of high-cost homes?

A new study found that 63.72% of properties in Budapest are on the market for more than twice the median price of homes in the city — the highest proportion of any global capital. That’s according to MoverDB.com, who analyzed price trends from local real estate websites in each capital city and found the balance of low-cost and high-cost homes in capital cities around the world.

Key findings

  • 63.72% of all housing in Budapest, Hungary’s capital, costs more than twice the median price of homes in the city — the highest split of high-cost housing in any global capital.
  • London has the fifth highest concentration of high-cost housing in Europe (27.93%).
  • The Brazilian capital of Brasilia has the highest split of housing that costs less than half the local average (50.13%).
  • Cyprus’s capital, Nicosia, has the lowest percentage of low-cost housing of any global capital (0.35%).

Half of All Housing in Brazil’s Capital is Low-Cost

Some 75% of the world’s population is forecast to live in urban areas by 2050, with the speed of urbanization being the most profound in developing countries. Yet there are already 850 million people living in slums and other “informal urban settlements,” and “in some megacities of low- and middle-income countries, almost 80% of the total population lives in slums,” according to researchers.


In Brazil, rapid expansion has made the country a major international economy. Still, the housing deficit across the country affects 28.5 million people. However, in the capital of Brasilia, half (50.13%) of the homes for sale are low-cost, i.e., sold at less than 50% of the average local price. Only one European city makes this list, but eight of the ten capitals with the least low-cost housing are in Europe. Worst-served is Nicosia in Cyprus (0.35%).


Nicosia also has the world’s fourth highest level of high-cost housing (42.64%). The Cypriot government is presently trying to address some of the worst living conditions in Europe, with the ruling party’s president Averof Neofytou stating that “we have to design our future housing policy with focus on affordable social housing as well as by launching funding programs that will facilitate access to homes, especially for our youth.”

London Has Europe’s Fifth Highest Level of High-cost Housing

London has the fifth highest level of high-cost housing in Europe (27.93%) but the ninth lowest level of low-costing housing in the world (2.98%). The Urban Reform Institute reports that London has the eleventh worst housing affordability levels of any major market in the world. The UK’s stark rich-poor divide is exemplified by contrasting experiences in the borough of Tower Hamlets, where more than 20,000 families families are on the waiting list for social housing. There is a 43% rate of child poverty, despite being home to the major financial district of Canary Wharf — where bankers can pay upwards of £600,000 for a studio flat.

“Housing wealth has displaced other forms of capital in a number of developed economies since 1948 and has contributed to growing wealth inequality,” according to a report from Centre For Cities. The effects of this growing divide are often most pronounced in capital cities but also between capitals and regional cities since housing wealth tends to be less mobile than other forms of wealth.

There is an ‘odd couple’ with the highest rates of low-cost housing: the capitals of Greece, one of the lowest GDP nations in Europe, and Luxembourg, which has the continent’s highest GDP. However, the Greek capital is ahead by a significant margin despite a decline in social housing over the years. Athens’ iconic polikatoikias were constructed during a “spontaneous, extra-governmental building boom” during the post-war period as a means for pleasant, affordable housing. They have proved a durable solution for low-income citizens. However, socio-economic shifts and the fallout from the credit crisis have warped the market, with locals gradually being priced out by wealthier buy-to-Airbnb investors.

A Global Crisis On the Doorstep

While the housing crisis may have its most profound effects in developing countries, the world’s wealthier capitals are among those presenting unprecedented obstacles in the wake of the pandemic. “Half the middle classes are richer than they ever thought they would be,” as Saskia Sassen — the urbanist who gave us the phrase “global city” — puts it, “and half are poorer.” It’s a problem all over, with 90% of cities sampled for a recent survey considered unaffordable according to common standards.

Land quotas, the repurposing of vacant properties and sustainable low-rent energy solutions, such as green roofs and solar panels in new builds, are among proposed counter-measures for an issue that has no prospects of going away any time soon — as long as the basic right of safe, affordable housing is shackled to the blight of wealth inequality.

Huge upheaval brewing in the Hungarian property market

Budapest real estate housing crisis in Budapest's real estate market

The madness in the rental housing market is about to begin soon, as students searching for apartments flood Budapest. But what can one expect? Well, according to experts, not much good, as an increasing number of people are shifting towards the rental market.

The rising interest rates, inflation and fluctuations in the euro exchange rate pushed many towards the rental market instead of purchasing properties. The interest has not diminished since then, explained Károly Benedikt, the PR and analysis manager of Duna House. He added that the demand for rental apartments is growing continuously, while the supply remains relatively limited in comparison, writes Pénzcentrum.

High demand, low supply

“Although the increase in housing prices came to a halt and the demand significantly declined by the end of 2022, it is not typical seeing property owners selling the properties they previously purchased as investments. Investors are typically not looking to sell now; instead, an increasing number of people are turning their savings into real estate investments.”

-said Benedikt about the prospects of property ownership.

There haven’t been any changes in the offerings of Otthon Centrum (OC) in recent times. The current supply remains the same both nationwide and in the capital as it was a year ago. The clear increase in prices indicates a growth in demand, while the supply has not been able to expand. This explains the higher competition for rental apartments.

Student expectations

The high school graduation exams are already underway, and soon the admission scores will be revealed. This will set the Hungarian rental housing market in motion, as it always signifies a significant surge in demand.

OC also highlighted that besides students, there is demand from working individuals (new graduates, those relocating to the city for work) in major university centres, particularly in Budapest. This additional demand, which appears cyclically, can lead to price increases. This will be particularly interesting in cities where significant investments are currently taking place, attracting a substantial number of new workforce.

Possible price reduction

As for when these extremely high rental prices will start decreasing, experts are pessimistic.

“If, in the next 1.5-2 years, the ongoing decrease in housing prices leads to a moderation in the overvaluation of residential properties and we recover from economic difficulties, homeownership may become more accessible to many, resulting in fewer people being forced into renting. This could logically provide a basis for the slowdown or cessation of rental fee increases.”

-reported Ingatlanpont.

Károly Benedikt underlined that the current level of demand always influences the price levels of rental properties. In the current rental market, the demand remains very strong. This is expected to continue driving further growth and strengthening the rental market until there is a decrease in loan repayments and interest rates.

According to OC, significant price decreases in the rental market have only been caused by external shocks in the past decade (such as the pandemic). In the short term, there is no indication of substantial decreases in sight.

 

Cheap holiday home at Lake Balaton? Here is the list!

The area around Lake Balaton attracts both domestic and foreign visitors and property buyers for understandable reasons. If you are considering buying a holiday home around the Hungarian sea, you have quite a few options even below HUF 6 million (EUR 16,251). Evidently, they are in need of major renovation.

If you accept having to drive 20 minutes to Lake Balaton from your new holiday home, this article is for you. Of course, you will certainly have to spend several times the purchase price on these properties for renovation. However, in return, you can get away with buying them without a mortgage. Pénzcentrum has compiled a list of the 5 cheapest properties around Lake Balaton right now.

Usually, at Lake Balaton, you should start looking for a holiday home with HUF 30 million (EUR 81,300) or even more. According to experts, the only properties in the lower price bracket are those further from the waterfront, which are more outdated and in need of renovation. Properties that fall below the HUF 20 million (EUR 54,195) mark are in need of renovation and/or are far from the lake, Pénzcentrum reports.

None of the 5 cheapest properties found by Pénzcentrum cost more than HUF 6 million. So you don’t necessarily need a home loan to buy them.

These are the 5 cheapest properties around Lake Balaton right now

1. Zalakomár, HUF 3.6 million

zalakomár property
Source: ingatlan.com

Currently, the cheapest house advertised with a photo is a property in Zalakomár, for HUF 3.6 million (EUR 9750). The price per square metre of the 60 square metre, 2-bedroom property is just HUF 60,000 (EUR 162.50). The only problem is that the house needs a complete renovation: it is missing windows and doors. In return, Zalakaros is nearby and Lake Balaton is 20 minutes away.

2. Karád, HUF 4.8 million

karád balaton property
Source: ingatlan.com

An adobe house in Karád is for sale for HUF 4.8 million (EUR 13,000), located in the vicinity of Balatonszemes, Balatonszárszó and Balatonlelle. The 35-square-metre building is actually a wine cellar with a press house and one room. It is located in the inner area, but the water and electricity are still to be connected.

3. Várvölgy, HUF 4.9 million

várvölgy balaton property
Source: ingatlan.com

For HUF 4.9 million (EUR 13,272), we can also own a 115-square-metre house in Várvölgy (a house for HUF 42,000 (EUR 113,76) per square metre). The property consists of two attached houses, one of which can still be saved, the other is to be demolished. In addition, it has a shared yard, but with their own yard, an elderly couple still lives here. It is close to Badacsonytomaj, Keszthely and Tapolca.

4. Sármellék, HUF 5 million

sármellék balaton property
Source: ingatlan.com

For HUF 5 million (EUR 13,547) you can buy a dilapidated house in Sármellék with 254 square metres. It has electricity and a drilled well on the property, but it is in need of major renovation. However, Balatonszentgyörgy and Keszthely are within easy reach.

5. Somogyvár, HUF 5.7 million

somogyvár balaton property
Source: ingatlan.com

The fifth cheapest property around Lake Balaton on the list is a 50-square-metre house on a 6,000-square-metre plot in Somogyvár for HUF 5.7 million (EUR 15,428). The house is in need of complete renovation and modernisation, but the utilities are theoretically installed. The nearest settlements are Fonyód, Balatonlelle, Balatonfenyves.

The Hungarian housing market is struggling: this is how it could be boosted

Budapest real estate housing crisis in Budapest's real estate market

The Hungarian housing market is underperforming compared to not only its previous numbers but also in a regional comparison. Can government grants boost the sales of new homes in Hungary in the future?

The Hungarian construction industry is weak, which has a negative knock-on effect on the Hungarian real estate market as well, forbes.hu reports. The number of new homes built in 2023 so far underscored any previous expectations.

State of the Hungarian housing market

According to data from the Hungarian Central Statistics Office (KSH), in the 1st quarter of 2023, a total of 3613 new dwellings have been built, 20 percent fewer year-on-year. Based on issued building permits and simple declarations, the number of dwellings to be built was 4,989. This is 38 percent less than in the same period of 2022.

The decrease is most significant in Budapest, where only a total of 1,404 apartments were put into use, 42 percent less than a year earlier.

“The new housing market has taken a hit as inflation has accelerated, energy prices have risen and financing has become more expensive due to double-digit interest rates” – forbes.hu quotes the analysis of the Cordia property development company.

Hungarian buyers are at a disadvantage compared to regional neighbours

Cordia has also expressed its concerns about Hungary’s situation in a regional context. According to their experience, Poland and Romania faces similar issues as Hungary, but their housing markets are showing “signs of recovery”, meanwhile the market in Hungary has just hit rock bottom.

“We hope that the recovery will then start to pick up here in Hungary” – said Tibor Földi, Chairman of the Board of Cordia International. “At the same time, there is still a reason for optimism. There’s no economic downturn, significant unemployment and, of course, no Swiss franc loans, in contrast to the 2008-2009 crisis. This also means there is no pressure to sell second-hand homes, for example.”

To boost the Hungarian housing market, the expert would like to see some new state grants. Földi cited an example from Poland, which Hungarian legislators should consider to support activity in the housing market.

In Poland, new legislation is set to enter force, which adjusts the annual interest rate on mortgage loans for people under 45 years old who are about to buy their first home to 2 percent (plus bank margin) for the first 10 years of the loan, compared to the current market rate of above 9 percent.

High inflation rates also mean that for the first time in many years investing in property is not such a good option in Hungary.

Are foreigners fleeing the Hungarian real estate market?

real estate property in budapest rental market home prices

The Hungarian real estate market is no longer that attractive to foreigners. Among the approximately 125,000 transactions carried out on the Hungarian real estate market last year, in 2,524, cases the buyers were foreign investors who were not citizens of the European Union, the European Economic Area (EEA), or Switzerland.

The Hungarian real estate market did not experience a major price drop

As we have written before, despite stagnation and a slowly arriving turning point in the Hungarian real estate market, prices were still higher in most cases in Q4 2022 than a year earlier. The average price for new homes, according to KSH, was HUF 54.5 million (EUR 145 thousand) in Hungary, up HUF 8.5 million (EUR 22 thousand) compared to the previous year. The average price per square metre is HUF 900 thousand (EUR 2,400), HUF 180 thousand (EUR 480) more than the average price in 2021. Last year, there was no significant drop in prices on the Hungarian real estate market, which also affected the willingness of foreign citizens to purchase real estate.

From whch countries are people buying real estate?

The majority of real estate acquisition applications, 73 percent, concerned houses or apartments in the capital, writes infostart.hu. The capital was followed by Pest, then the counties of Zala and Győr-Moson-Sopron in the list of popular investment areas. Chinese property buyers are still the most active on the Hungarian market, although their share decreased from 36.3 percent in 2021 to 31.5 percent last year. Among the Chinese, the most popular areas within the capital were Angyalföld, Erzsébetváros and District X last year.

The proportion of Ukrainian buyers increased by 2.5 percentage points

What is new is that the proportion of Ukrainian buyers increased by 2.5 percentage points compared to the previous year’s data. Therefore, Ukrainians became the fourth largest group purchasing Hungarian real estate in 2022. The proportion of Russian investors increased by almost 1 percentage point by 2021, and Hévíz and the XIIIth district of the capital were still attractive to them. The share of Israeli investors rose by 2 percentage points to 7.41 percent, nearly half of the transactions concluded by them took place in the VIth district.

Citizens of the United Kingdom also acquired a significant proportion of over 5 percent of properties in Hungary last year, who mainly preferred apartments in the IXth district. The main target of the Americans in nearly 4.2 percent of the deals was Sóskút in Pest County.

Russians owe billions and a Budapest palace to Hungary: will they return them?

PM Orbán and Putin Russian gas

The Russian-led International Investment Bank (IIB) received HUF 74 billion (EUR 200 million) from the Hungarian government as capital when Budapest joined the institution. Furthermore, it was given the Chain Bridge Palace to serve as headquarters. The 3,200 sqm palace is one of Budapest’s most expensive building located at the Zero Kilometre Stone. Its value is around HUF 6-7 billion (EUR 16.2 – 18.9 million). But will the Russians give the money and the palace back?

The government takes it lightly

Hungary decided to leave the International Investment Bank in April, following American threats and NATO pressure as well as the travel ban of the bank’s Hungarian vice-chairman, Imre Laszlóczki. Szabad Európa wrote that more sanctions can be introduced against multiple Hungarians thanks to a new US law.

After Hungary announced its decision, the bank said it would cease operations in Hungary. However, it owes a huge sum to Hungary, Blikk wrote. In addition, they have to leave the Budapest palace. IIB told the Hungarian tabloid that they aimed to establish contact with the government concerning the two issues but they have received no reply. The minister in charge said they have given a verbale notice to the bank.

Zoltán Vajda, a Socalists MP, asked Márton Nagy, Hungary’s Economic Development Minister, about the bank’s plan regarding the Chain Bridge Palace. Mr Nagy replied that “it belongs to them, and they can sell it to whomever they want”. The building is one of the most expensive in the capital at the Buda bridgehead of the illustrious Chain Bridge. Below you can see a photo:

The bank cannot sell the palace

The Hungarian state theoritically has the option to purchase the palace. Since IIB is in financial trouble, they may sell it back to Hungary. Mr Vajda said Fidesz politicians did not mention the Hungarian state’s purchase option. The economic development minister said the bank might sell the building to whomever they want, but that is untrue. Vajda hopes nobody will take it below the price.

Blikk asked the government whether Hungary has the chance to reobtain the invested capital from the bank (approximately 200 million euros). Furthermore, they also inquired whether the government intends to repurchase the palace. But they have not received answers. Vajda believes the administration should take the issue more seriously.

The IIB is leaving the Hungarian capital with the help of an international removal firm. The flags have already been removed from its facade. The replacement of the staff will be carried out soon. Concerning the Chain Bridge Palace, the bank said it was in their ownership, and the Directorate would make a decision later on.

They added there were no ongoing talks concerning any issues between the bank and the government because the administration did not establish contact with them. The USA and other Western powers have condemned the IIB and the Orbán cabinet’s decision to join the bank. Hungary granted immunity for the staff and many believe the bank helped Russian spies to work undercover.

Featured image: illustration

Budapest downtown properties are still popular among Chinese buyers

Budapest property real estate market housing

Chinese are the largest nationality among the non-EEA real estate buyers in Budapest. They prefer to buy property in the 13th, 7th and 10th districts.

However, according to the latest data, their rate fell a bit. In 2021, it was 36.3 percent, while in 2022, that decreased to 31.5 percent among non-EEA citizens. Meanwhile, the rate of Ukrainians grew by 2.5 percent and, interestingly, there were a lot of UK citizens buying property in Hungary (5 percent), haszon.hu wrote. Out of the 125,000 transactions, only 3,000 concerned non-EEA citizens.

Parbeszed-Greens: Government preferring ‘Chinese investors to Hungarians’

The government “prefers Chinese investors to the Hungarian people”, Richárd Barabás, spokesman for the opposition Párbeszéd-Greens party, told an online press conference on Saturday, in reference to planned battery plant projects in eastern Hungary. Barabás said it was “incomprehensible, how a battery plant, built as a Chinese investment, using foreign materials and employing very few Hungarians, in low positions and for meagre wages could contribute to Hungary’s development”.

The government’s argument that it is aimed at protecting Hungarian jobs is false, Barabás insisted, and mentioned a Samsung project at God, north of Budapest, in which “only half of the employees are Hungarian, including a negligible portion of locals”. Referring to the government’s proposal to introduce less stringent regulations for foreigners taking up employment in Hungary, Barabás said “the government has admitted that there is no labour supply to support the battery plant projects”. Barabás said his party would turn to the European Commission over the battery plant projects. He insisted that the plants would be constructed too close to residential areas and their water consumption would exceed EU-set limits.

High inflation has led to an unusual result in the Hungarian property market

Hungary real estate market Budapest

High inflation is also affecting the Hungarian property market. As a result, the market has slowed down as real estate is no longer such a good investment.

Cross-national trends in Hungary

With inflation falling, government bond yields have also risen, so property in Hungary is no longer such a good investment. For this reason, many people are holding off on buying a home.

“The real estate market has slowed down and is less attractive compared to inflation and even to the interest rates available on the residential government bond market,” writes Novekedes.hu. The portal reports that there will be a serious downturn in the coming year due to inflation, high home loan interest rates and the threat of recession.

Prices are also falling in Great Britain and Germany, the biggest property markets. Again, the reasons include high inflation and rapidly rising interest rates.

The property market is taking a downturn

“All the existing negative phenomena (less borrowing, stagnating prices, lower number of transactions) have already surfaced, but market players still think there is reason for optimism,” the portal writes.

These trends were confirmed by several real estate agencies. In April, Otthon Centrum reported that the rise in prices per square metre had slowed down due to the fall in demand. At the same time, the number of construction projects has also fallen, napi.hu reports.

According to Duna House, there was also a downturn in the Hungarian real estate market in the spring. In April, for example, a third fewer homes changed hands than in 2022. Furthermore, far fewer mortgage loans for housing were closed. Ingatlan.com added that the proportion of people buying with a loan also fell significantly.

Caution has always been a feature of difficult economic times, so this is no surprise. Market players are therefore right to wait it out, but Hungarian real estate market participants remain optimistic.

A guide to buying property in Spain for Hungarian buyers

Buying Property in Spain with Spain Homes

Sponsored content

Spain’s rich culture, stunning landscapes, and warm climate have made it a popular choice for international property buyers. If you are Hungarian and considering purchasing a property in Spain, you are joining a growing number of foreigners who have discovered the benefits of investing in Spanish real estate.

We aim to provide you with a comprehensive guide on buying property in Spain as a Hungarian buyer, covering key considerations, legal requirements, and practical tips to ensure a smooth and successful purchase.

Research and Location Selection

Before diving into the Spanish property market, it’s essential to conduct thorough research and identify the ideal location for your investment. Spain offers diverse regions with unique features, such as the bustling cities of Barcelona and Madrid, the sun-soaked beaches of Costa del Sol, and the serene countryside of Andalusia.

Consider your preferences, lifestyle, and objectives when choosing the right location that suits your needs and budget.

Engage Professional Assistance

Navigating the Spanish property market can be complex, especially for foreign buyers. Engaging the services of a reputable local real estate agent, lawyer, and translator is highly recommended.

A reliable agent can provide valuable insights, assist with property searches, and negotiate on your behalf. A competent lawyer will guide you through the legal aspects, ensuring compliance with Spanish regulations.

 Financial Considerations

Understanding the financial aspects of buying property in Spain is crucial. As a Hungarian buyer, you will need to consider the following:

  1. Budgeting: Determine your budget, including the purchase price, associated costs (taxes, notary fees, etc.), and ongoing expenses (property maintenance, utilities, etc.).
  2. Financing: Explore your financing options, whether through personal savings, Hungarian banks, or Spanish lenders. Ensure you understand the terms and conditions, interest rates, and any potential currency exchange risks.
  3. Taxes and Fees: Familiarize yourself with the applicable taxes and fees, such as the property transfer tax (ITP), value-added tax (VAT), notary fees, and registry fees. Consult with a tax advisor to understand your tax obligations in both Hungary and Spain.

Legal Requirements:

It’s essential to comply with legal requirements during the purchasing process to protect your investment. Consider the following key steps:

  1. NIE Number: As a foreigner, you will need to obtain a Spanish tax identification number (NIE). This unique identifier is required for various legal and financial transactions.
  2. Due Diligence: Conduct thorough due diligence on the property, including verifying ownership, checking for liens or encumbrances, and reviewing planning permissions and licenses.
  3. Purchase Contract: Once you find the desired property, a purchase contract (contrato de arras) will be drafted, detailing the terms and conditions of the sale. Have your lawyer review the contract, to ensure your interests are protected.
  4. Notary and Registry: The final step involves signing the deed before a notary public and registering the property in the Spanish Land Registry. Your lawyer will oversee these procedures, and ensure legal compliance.

Practical Considerations:

Beyond the legal and financial aspects, consider the following practical factors:

  1. Healthcare and Insurance: Understand the Spanish healthcare system and consider private health insurance options to ensure adequate coverage.
  2. Language and Culture: Familiarize yourself with the local language (Spanish) and customs to facilitate communication and integration into the Spanish community.
  3. Property Management: If you plan to use the property as a second home or rental investment, consider hiring a local property management company to handle maintenance, rentals, and other logistical matters.

Overall, buying property in Spain as a Hungarian can be a rewarding endeavor. Conducting thorough research, engaging professional assistance, and understanding financial considerations are key to navigating the Spanish property market successfully. Choosing the right location, having reliable real estate and legal support, and complying with legal requirements will protect your investment. Additionally, considering practical factors like healthcare, language and culture, and property management can contribute to a smooth purchase in Spain.

You can confidently pursue your property purchase in Spain with the right approach and proper considerations. Thorough research, professional assistance, and an understanding of financial and legal aspects are crucial. Taking into account practical factors such as healthcare, language, and property management will further enhance your buying experience. You can maximize the chances of successful property acquisition in Spain as a Hungarian buyer by carefully considering these elements.

At this point, Spain Homes ® provides an excellent opportunity for Hungarian buyers looking to invest in property in Spain. Their property listings consist of thousands of apartments, villas, townhouses, commercial properties, lands for sale, and other assets. Their expert property team guides you through the whole property purchasing process, from finding your dream home to getting the title deed.

Invest in your dream of owning a property in Spain with confidence, knowing that Spain Homes ® has the expertise and reliable services to guide you through the Spanish property market. Contact us today to turn your dream into reality!

This is now the most profitable investment option in Hungary

car park garage

Owning garage has become a luxury in downtown Budapest and some other Hungarian rural municipalities. It costs almost as much as a studio apartment 6-7 years ago, and there is a shortage. Thus, owning a garage may generate higher profit than an apartment. And that shortage concerns storages in condominiums. These two investment targets are now the best choices in Hungary.

László Balogh, the leading analyst of ingatlan.com, said garage prices increased 20-25 percent every year in the last seven years. However, the price rise concerning apartments stopped one year ago, index.hu wrote. The garage price increase did not. Since the number of cars increase, finding a safe parking place is a growing problem for car owners. Investors do not have enough money to create enough parking places under or near the new buildings. As a result, they pay extra fees to the municipal council, but that does not solve the problem in the long run.

People would like to rent a garage because of the growing parking fees and the shortage of parking lots, Ferenc Farkas, the CEO of Ingatlancsoport Ltd, said. As a result, garage prices skyrocketed in the last few months. According to ingatlan.com’s László Balogh, garage costs increased by 20 percent in the last 12 months. In the downtown, the increase is 50 percent compared to 2020.

In some districts, the average price exceeds HUF 2 million/sqm (EUR 5,378/sqm). In the Buda Castle district, even HUF 2.4 million/sqm (EUR 6,454/sqm) is not exceptional. That means you must pay almost EUR 54,000 for a garage there. In the 5th district, the heart of Pest, there is no garage for sale, Mr Balogh added. That price goes below HUF 170,000-200,000/sqm (EUR 450-500/sqm) in the outer districts.

Thinking about investing in Hungary? Here is why you should buy garages, storages

The average sale price in Budapest is HUF 7.4 million (EUR 19,905), while the rental price is around HUF 25,000 (EUR 67.25). In the rural cities, those numbers are 5-10 percent lower. From the middle of the 2010s until 2020, investors could realise a 1.5-2 times higher profit on garages than on apartments.

Furthermore, the money you need to invest is much lower, so the segment has become popular. Moreover, if somebody does not pay, you can easily throw them out. That is much more difficult in the case of apartments and houses. Finally, garages are not affected by the government’s modifications concerning the utility price scheme. Therefore, today, two garage businesses out of three are due to investment reasons. Empty garages find new tenants in 1-2 months, and more people would like to buy garages than sell them.

Currently, there are 8-900 garages for sale in Budapest, most of them in the outer districts. The number of garages for rent is higher. In the municipalities, those numbers are 500 and 400.

Storages in condominiums are also very popular. Their sqm price sometimes reaches 50 percent of that of the apartment.

Hungarian real estate prices still sky-high despite recent price drops

Despite stagnation and a slowly arriving turning point in the Hungarian real estate market, prices were still higher in most cases in Q4 2022 than a year earlier, with a record low turnover rate as well.

The Hungarian Central Statistical Office (KSH) published its latest analysis of the changes in the Hungarian housing market. Record high prices resulted in record low turnover rates, which means that in some cases the inflation brought about even more disruption in the market than the Covid pandemic. Real estate prices soared last year, with the aggregate housing price index 16.6 percent higher than a year earlier, according to the Hungarian Central Statistical Office (KSH). According to telex.hu, this is more than the annual average inflation rate.

Hence, housing market sales fell by a fifth in Q4 2022. The number of houses sold fell all across the country except in the capital city of Budapest. KSH’s latest analysis confirms what most independent real estate agents have experienced in the last months: the price growth gradually slowed down during the year and turned into a decline in Q4 2022.

The price of new homes increased drastically

The average price for new homes, according to KSH, was HUF 54.5 million (EUR 145 thousand) in Hungary, up HUF 8.5 million (EUR 22 thousand) compared to the previous year. The average price per square metre is HUF 900 thousand (EUR 2,400), HUF 180 thousand (EUR 480) more than the average price in 2021.

In Budapest, the average square metre price exceeded HUF 1.1 million (EUR 2,935), up 21 percent compared to 2021. Among the districts with an increased number of new housing projects, only in District IV would it be possible to find a newly built apartment for less than HUF 1 million per square metre. At the same time, the limited number of new apartments available in District XII already sold for an average price of over HUF 2 million (EUR 5,338), while those in District V, in the heart of Budapest, close to the Parliament, were close to HUF 2.5 million (EUR 6,672).

Read also: Rental prices in Budapest continue to rise steadily

Positive trends in the second-hand Hungarian real estate market

In Budapest, a second-hand apartment costs on average HUF 47.4 million (EUR 126 thousand), HUF 7 million (EUR 18 thousand) more than in 2021. The main increase in price was for panel flats, up by 23 percent in a year to nearly HUF 36 million (EUR 96 thousand). The price of non-panel condominium apartments increased by 18 percent to HUF 48 million (EUR 128 thousand), while the price increase for detached houses in the capital was more moderate at 13 percent, but their average price still reached nearly HUF 80 million (EUR 213 thousand).

Prices have increased steadily but at a slowing pace over the year, with only the last quarter showing a slight 1 percent decline. However, prices for second-hand detached houses fell significantly in Q4: the average price dropped by 29 percent.

In 2022, the energy efficiency aspects of the housing market have become more important for buyers. According to KSH, the quality of second-hand detached houses for sale is low, as their utility costs can be more than four times higher than that of new homes.

As we have previously reported, due to the low energy efficiency of second-hand homes, potential buyers can save big on purchasing Hungarian real estate, as their bargaining position is much stronger than before the utility cost crisis.

Good news: House price decline to continue in Hungary

In 2022, second-hand house prices started to fall in the last quarter of the year in Hungary. Fortunately, this trend is expected to continue this year. Buyers are still in a good bargaining position as prices continue to decrease moderately due to high interest rates and energy consciousness.

A modest fall in house prices

According to the latest data from the Hungarian Central Statistical Office (Központi Statisztikai Hivatal, KSH), the price of second-hand housing fell by 2.6 percent in the last three months of last year, ingatlan.com reported. The portal quoted László Balogh, chief economic expert of ingatlan.com, as saying that the latest data are in line with expectations. In the supply market, it could already be seen last autumn that second-hand house prices could fall modestly in the last quarter of last year.

Long-term data shows a huge increase since 2015

However, it is also true that, despite the quarterly price decline measured by the KSH, the year-on-year increase was still almost 17 percent at the end of 2022, 168.hu reports. It is also important to note that, based on long-term data, the price of second-hand housing has increased two and a half times compared to 2015.

Last year, according to preliminary data, more than 120,000 homes were sold. These included 112,000 second-hand homes. Last year’s turnover in the housing market was in line with expectations; however, it was below the figure of 161,000 in 2021 and the figure of 149,000 in 2020, Mr Balogh added.

Significant drop in house prices in some places

According to data from ingatlan.com, prices have fallen by more than 3 percent in a number of municipalities compared to the beginning of this year. In Budapest’s agglomeration, for example, in Diósd, Tököl or Nagykovácsi, the average price per square metre of family houses for sale has fallen by 6.5-9.6 percent, azenpenzem.hu writes. In Fonyód, on the southern shore of Lake Balaton, prices fell by 6 percent, and in Rajka, on the western border, by 6 percent.

The fall in prices to continue this year

According to László Balogh, the market for second-hand housing may remain subdued for the time being. At the same time, buyers are still in a good bargaining position due to falling demand. The fall in house prices is likely to continue this year due to buyers’ increasing energy consciousness and high interest rates on home loans.

Rental prices in Budapest continue to rise steadily

Budapest property real estate market housing

Due to the ever-increasing prices, renting an apartment has become a luxury. Nevertheless, the majority is still willing to pay the high rental prices in Budapest if the apartment has good parameters. Data show that many people prefer to rent real estate in the current uncertain market environment rather than purchase a home. 

Rental prices in Budapest are skyrocketing

Depending on location and equipment, apartments in Budapest can be rented out up to HUF 100,000 (EUR 265,95) more expensive, reports Pénzcentrum. According to Zoltán Gadanecz, the founder-owner of GDN Real Estate Network, the current trend clearly shows that people looking for rentals strikingly outnumber those who consider home purchases in Budapest. This may be due to the fact that many people don’t want to risk taking out a loan.

“For a long time, we kept being warned how expensive loans are. Interest rates skyrocketed last year, they were already over 10 percent at the end of the year, but since then a marked decrease has started. We are now at 8 percent interest rates, which already belong to the healthy category, but it takes time until this information reaches the masses. This is one of the reasons why the majority consider renting to be on the safe side,” he said.

Tenants are willing to pay more

Since the supply did not pick up, but the demand remained robust, the rental prices in Budapest started to surge. According to Zoltán Gadanecz, people are aware that they will not get their hands on a good rental unless they are ready to reach deeper into their pockets. “People do not mind paying HUF 40-50 (EUR 106,38 – 132,98) thousand more for a property that meets their needs in all its parameters, one that is cosy and feels like a proper home. Tenants are willing to spend more on rent and try to cut back on other expenses instead.”

What does the future hold?

According to the expert, what the future may bring depends on several factors. On the one hand, from the second half of the summer, as the academic year approaches, another wild run-up in rental prices can be expected. On the other hand, this can be counterbalanced if, in addition to falling interest rates, the market starts to recover and more people will opt for purchasing.

Read also:

Fundamental turn on the Hungarian property market: 10 pc price drop

Budapest property market

Following last year’s dramatic price increase, Hungary’s property market prices are projected to normalise in 2023. Since demand has been falling for months, buyers can negotiate down the prices by almost 10 percent. Experts say if interest rates remain high or the government does not introduce new allocations, this trend will persist.

The reasons behind moderate demand are the high inflation and interest rates as well as the modification of Hungary’s utility price scheme. As a result, in end-2022, real estate agencies experienced a significant price surge. In a year-long period, the price hike reached 16 percent, but buyers waited until the last months to go through with the transactions.

Supply exceeds demand mostly in the case of huge, energetically not modernised properties in need of renovation. However, most sellers do not want to give away their real estate for a lower-than-expected price, so they wait for better days. As a result, the number of transactions dropped significantly compared to 2022.

Béla Tóth, an associate of the Debrecen-based DebOtthon real estate agency, said that he expects growth in transaction numbers. He believes that the trend will persist unless the government’s financial support policies change and interest rates in the property market will start to fall. In that regard, today’s central bank decision gave some reason for hope. Looking at different Hungarian municipalities, prices are particularly high in Debrecen; a square metre exceeds HUF 700,000 (EUR 1,852) on average. Debrecen is considered attractive because BMW and Catl will build new plants in the city, and Debrecen University counts thousands of foreign and Hungarian students. Tóth added that owners are supposed to sell their properties for 10 percent less, but only a few do.

Make the move if you have cash to invest

The owner of ArtHome in Szeged confirmed the previously mentioned trend, explaining that investors are gone and buyers and sellers are now in a ‘wait and watch’ mode. Prices normalised compared to the previous boom, but owners do not want to negotiate and keep the prices up.

In Mosonmagyaróvár, the trend is the same, and owners believe they will find a buyer sooner or later. They base their hope on the higher wages most locals earn working in Austria as well as on the growing demand for Austrian and Slovakian nationals. Nikoletta Szabó, leader of a local real estate agency office, predicts that buyers will return in the next few months.

The same goes for Sopron, a city also located near the Austrian-Hungarian border. Demand is high for energy-efficient small apartments and modernised panel houses. In Miskolc, buyers can negotiate the prices down by almost 10 percent. But the annual number of transactions may fall by 20-30 percent in 2023 compared to 2022.

To sum up, if you are considering purchasing property in the municipalities, you should probably make the move now.

Hungarian real estate market outlook: what to expect in the next 12 months?

Hungary real estate market Budapest

Is there a prospect that the Hungarian real estate market prices will drop in the next 12 months by spring 2024? The following economic trends will determine the fate of the market. 

What could the Hungarian housing market look like in the next 12 months? Portfolio presented this question to several real estate experts in their Housing Market Attitude survey to map the potential scenarios.

As we have previously written, the Hungarian real estate market is currently stagnating. The prices have reached their peak and demand cannot follow further increases. Due to the high inflation and interest rates, potential buyers won’t apply for loans, therefore, they must turn their attention to the rental market.

But what will the real estate market look like in 12 months regarding new home purchases? The fact that the price growth fell below the expectation of the analysts is surprising, but a real turnaround might not be a viable scenario in the following months.

Grim outlooks on the real estate market

On average, the 9 experts surveyed by Portfolio expect a slight, gradual decline in prices until mid-summer, followed by a painfully slow rise until April next year. It is likely that the stagnation will end, and prices will start to rise again when interest rates are low enough for people to seriously consider taking loans again, thus increasing market demand.

On the rental market, prices will more closely keep track of inflation. As we have reported earlier, with the end of the utility crisis scare and the growth of wages, the prices on the rental market in Hungary started to increase again. The experts calculate that by April 2024, rental prices could steadily increase by 8-9 percent.

Market specialists are currently advising against purchasing newly built homes. Alongside the large interest rates on loans, construction firms are installing higher quality, more expensive materials to achieve improved energy efficiency in case of another utility crisis. As a result, a 7-8 percent price increase is expected by April 2024, especially in Budapest.

As to what factors and economic trends could have the greatest impact on the real estate market, the experts agreed on common themes.

First, to increase demand interest rates must be lower, and the government ought to find ways to combat the record-high inflation, which is still higher in Hungary than in Western-European countries. They also mentioned the impact of the Russo-Ukrainian war on the price of construction materials and the frozen EU funds which are being withheld due to the rule of law mechanism. Finding solutions to these issues may stimulate new investments in the Hungarian housing market.

Read also: Budapest denies tax payment to the State, files lawsuit against it