They interviewed several real estate agents and developers and asked whether the current refugee crisis have affected the market at all (it has not). They were told the residential property market is surging, with 40% more real estate transactions taking place the first half of 2015 compared to the same period a year ago (we also wrote about this earlier, here: http://mhomes.hu/en/blog/show/budapest-real-estate-market-is-on-the-move).
FT then continues to state that property in Budapest has become a preferred form of investment as base interes rates are incredibly low (around 1,5% at the time of writing this article). What also adds to (small-scale, private) investors running to property is the hungarian brokerage and credit union scandals of recent months, where many people lost money with financial institutions that they trusted.
As more and more hungarians and foreigners have looked into investing in property, and started buying them, prices naturally increased, in some districts and areas with more than 20% (Budapest’s 5th and part of the 6th Districts are the most popular examples).
However, even with those boosted prices, real estate in Budapest for foreign investors are still considered cheap. Budapest is a geopolitically very well placed capitol city of an EU country and as such, prices are almost guaranteed to escalate in the coming years.
The Financial Times also writes about the Chinese arriving into Hungary (and mainly Budapest), using it as their base to access other countries in the European Union. As it is well-known, the Hungarian government offers residency in case of buying state bonds for five years in the amount of 300,000 EUR. This has also helped to attract Chinese investors as they need to have an address for residency and therefore they tend to purchase a property in Budapest.
And as the Budapest Business Journal writes quoting data by EUROSTAT, home prices in Hungary saw a 11,9% rise in the second quarter of the year, which is the second highest figure among EU member states.
“The House Price Index (HPI) measures the price changes of all residential properties purchased by households (flats, detached houses, terraced houses, etc.), both newly built and existing, independently of their final use and independently of their previous owners,” the report says. An estimated 103,000 residential real estate transactions happened in Hungary between January and September 2015, which is more than the total number in any of the years of the crisis, between 2009 and 2013.
Sources:
http://on.ft.com/1jgjkXX
http://bbj.hu/economy/eurostat-hungarys-home-prices-up-119-in-q2_105367
