The rise in the Hungarian capital’s housing prices has reached a record level: according to the Global Residential Cities Index from Knight Frank, Budapest property prices rose 23% in 2018.
After five years of massive growth in the residential property market, it reaches a psychological limit of 1 million forints per square meter of more and more downtown apartments.
According to the "Global Residential Cities Index - Q3 2018." report by Knight Frank, Budapest shows the highest 12-month residential property price growth in Europe.
According to the report released by the Hungarian National Bank (MNB), the Hungarian housing market continued to intensify in the first half of 2018, which in addition to the dynamic rise in the apartment prices, was reflected in the increase in the sales volume.
Budapest is not only the favorite choice of tourists in the region but the Hungarian capital is also the top pick among real estate investors. According to the latest data, in the Central-European region, Budapest provides the best value for money if you are thinking about buying an apartment in the city center.
According to the summer announcement, the government does not intend to extend the validity period of the 5% VAT on new residential properties which is in effect until December 31, 2019.
In Budapest there are currently 20 000 apartments being built or planned to be built.
A new proposal for the year 2018 would lift the 14% tax on rental income.
The national average in 2016 on the value increase of residential properties in Hungary was 15,4%, according to a report by the Hungarian National Bank.
Hungary’s real estate market is in an upward spiral after years of decline due to the real estate market crisis in 2008. The expected growth is five-to-ten percent in the following two years. Beginning in 2014, property prices began to grow by over ten percent. Hungary’s low interest rate, a record low at 1.5%, and a stabilized banking system lured buyers and investors alike. The trust factor has returned to the real estate market in Hungary.
At the end of 2015, the Hungarian government decided to allocate money towards a new subsidy purchase program for young families with children. The minister has set a budget of HUF 40 billion but has said that this could be increase if the demand is high enough. It is important to note that over 80% of the Hungarian population are in favor of this government action. The minister has said that the government is willing to help several hundred thousand families.
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