Why invest in real estate in Hungary?

Looking to invest in real estate in Hungary? Here's what you need to know about this booming real estate market.

Hungary has seen a surge in foreign investment for several years. However, some investors remain wary of venturing into an unfamiliar real estate market.

Investing in a foreign real estate market, however, offers an additional possibility when local real estate markets prove too expensive or can no longer offer attractive rental yields.

To give an overview of the market and the reasons for its attractiveness, let us highlight 6 key factors: the ease of access to Hungary for foreign real estate investors, Hungary's economic growth, its dizzying real estate growth, foreign investment statistics, prices and taxes on a real estate purchase in Hungary as well as the reasons for the attractiveness of this country internationally.

Easy access to Hungary

Budapest Airport continues to expand and the number of passengers continues to increase.

Many airlines (including low-cost airlines) operate numerous flights from there throughout Europe.

As foreign investors, it is therefore very easy to travel to Hungary quickly, even for very short periods.

Hungarian economic growth in figures

Hungary's economic growth is at the top of the European Union ranking.

Thus, in 2018, growth was 4.6% and the forecasts for 2019 are just as promising.

Real estate growth in Hungary

Eurostat statistics, as measured by the property price index, indicate an average price increase of around 4.3% in the Eurozone and the European Union for the second half of 2018, compared to the same period a year earlier.

Hungary, with a growth of 10.4%, is among the four European countries with the highest real estate growth.

According to Eurostat, Hungary is the country with the highest growth since 2015, with an increase of 31%, just ahead of Ireland and Latvia.

Security of real estate transactions in Hungary

According to statistics , nationwide, one in twenty real estate investments in Hungary was made by a non-resident, and in 2018, 9% of buyers were foreign investors.

If we move the cursor over certain districts (such as the 5th district in Budapest), one in three buyers was foreign.

Furthermore, as this is a member country of the European Union, there are no restrictions. Foreign investors can become owners of real estate under the same conditions as nationals.

For further information, we refer to the article detailing the procedure for acquiring real estate in Hungary .

Price and various taxes when investing in real estate in Hungary

What makes Hungary very attractive are both the real estate prices and the various taxes on real estate transactions.

Although the price per square meter in Budapest has skyrocketed, there are still many investment opportunities, whether in emerging districts or in secondary cities with high rental potential.

Taxes on real estate purchases are low and help to avoid adding to the final bill. Particularly noteworthy:

Registration fees: 4% of the purchase price
Attorney fees: 1% of the purchase price
Property tax: 5.6 euros/m²
VAT on new construction: 5% (until 2023)
Tax on actually taxable rents: 15%

Attractiveness and influence for real estate investment in Hungary

Budapest is one of the most popular destinations in the world. The city was ranked the second most beautiful city in the world to visit by the renowned CN Traveler magazine.

Its architecture, the quality of its food and wine, its safety and its exceptional thermal baths make it a very privileged destination.

The country also has excellent universities that attract tens of thousands of students each year.

It is also a prime destination for targeted medical tourism, particularly for dental care and spa treatments for retirees.

Real estate investment in Hungary for nursing homes is also experiencing significant growth in several regions of the country.

CONCLUSION

Real estate in Hungary has experienced strong growth in recent years. There has also been an influx of foreign investors in recent years.

One of the consequences is the impressive rise in prices in the popular districts of Budapest, which has an impact on rental yields, which nevertheless remain attractive compared to all the countries of the European Union.

In addition, there are still many opportunities to be seized, particularly in: