If you’re thinking about buying property in Budapest as a foreigner, you’re among a growing number of people to do so! Consider these essentials before entering into Budapest’s real estate market.
According to the latest real estate market reports*, the price increase of pre-owned homes in brick buildings is above 10 percent in all districts of Budapest, compared to property sales prices in the first half of last year.
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 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.
Over the last 3-5 years, the Hungarian real estate market has gone through tremendous changes. In 2013, there was a slow downturn in the pre-owned home market, followed by an accelerating rise in prices. This rise was moderated in 2017, but the real estate prices are still increasing.
With the new academic year starting in September, this month is certainly the season to see and expect the apartment rental market boom in Budapest.
2017 will be dominated by new home constructions, with an estimated total of 14,000-15,000 homes expected to be buitl this year.
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.
While Budapest, the capital of Hungary, may not be the first city that tourists heading to Europe put on their itineraries, it's becoming a new magnet for global real estate investors. Budapest is not as saturated with buyers and sellers as cities that are more on the beaten track. That's only part of its appeal, however. The "Pearl of the Danube" is a world class location with assets that outshine more high profile markets. The advantages to buying property there may never be as ideal.
A new wave of foreign property investors has descended on Budapest, the capital city of Hungary. According to a study recently released by estate agency Otthon Centrum, the first half of 2015 saw an astonishing increase of property transactions in the city. In fact, the total figure was ultimately revealed to be 40 percent higher than the final figure that was reported for the previous year. In a word, the property market for foreign investors in Budapest is booming at a rate that was frankly inconceivable even a few short years ago.
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