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Hungary's real estate market: from Budapest to Balaton

03.07.2023
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For more than 10 years, the Hungarian housing market has been one of the hottest in the EU, which was facilitated by both domestic demand and momentum from foreign buyers; At the end of last year, there were signs of cooling, but real estate in Budapest and resorts, nevertheless, continues to interest foreign investors and relocators; What is the current situation with sales of apartments and houses in the country, which regions are most popular, and whether prices are rising, we will tell in the material prepared jointly with experts from Hungarian agencies.

buy property in Hungary

About the country

Chardash and goulash – these two words are the first to come to mind when it comes to Hungary. The incendiary dance with a long lyrical introduction and thick spicy soup probably reflect the once hot temperament of the Magyars, who at the turn of the 9th-10th centuries A.D. were a real thunderstorm of Europe, no less than the Huns (who rose and dissolved in history a little earlier). Today, the inhabitants of Hungary are not like their warlike ancestors; they are friendly, hospitable and non-confrontational.

The Hungarian language is considered complex and different from most European dialects, as it belongs to the Finno-Ugric group. The explanation of how this people ended up in the Danube steppes lies in history. In the 9th century AD, the Magyars, who lived in the regions of the Southern Urals and the Volga region, moved west, lingered in the Black Sea steppes, and then went further to settle in the middle reaches of the Danube.

The climate in Hungary is temperate continental. Summers are quite hot and winters are cool. The average temperature in July in Budapest is +22 °C, and in January -1 °C. The country is protected from cold winds by mountains, from the west by the Alps, and from the north and east by the Carpathians.

Hungary does not have its own access to the sea, but this is fully compensated by other natural resources, primarily thermal springs, of which there are more than a thousand in the country, and over a hundred of them are therapeutic. Budapest is often called the SPA capital, as the city has 8 large wellness centers – baths with healing waters. Some bath complexes were built during the period of Ottoman rule, which lasted more than a century and a half (1526-1686). And the very first baths – thermal baths – appeared in these places back in the days of the Roman Empire.

The baths are incredibly popular with both tourists and locals. Hungarians, especially pensioners, like to dive into the pools of the Szecheni, Gellert, Lukacs bath complexes at any time of the year. For them, this is not only a way to improve their health, but also to have a good time, to communicate.

The largest thermal lake in Europe, Heviz, deserves special mention. The reservoir of volcanic origin has healing properties and is known far beyond the borders of Hungary.

Not far from Heviz stretches the "Hungarian Sea" » – Balaton. Resorts have been built on the coasts of the largest lake in Central Europe. The bathing season here lasts from spring to late autumn. For holidays with children, the southern part is more suitable - there are sandy beaches and a gradual set of depths. At the northern tip, the swimmer will not feel the bottom already literally a few meters from the shore, and besides, the entrance to the water is rocky.  

Thanks to lakes, health resorts and rich culture, Hungary attracts foreign tourists. Residents of the border countries of Austria, Slovenia, Croatia, Romania, Ukraine, Serbia, Slovakia and not only come to spend a vacation or a weekend in Budapest or Balaton.

The tourism industry is important for Hungary, but in addition to it, agriculture, metallurgy, mechanical engineering, pharmaceutical, chemical, and food industries are developed. At the beginning of the last century, when the country was part of Austria-Hungary, the production of cars began here. So, from the workshop for the manufacture of carriages, opened in Pest in 1895, an enterprise that produces buses has grown. After the end of the Second World War, it was nationalized and merged with the joint stock company "Ikarus", founded back in 1916. The famous brand of buses in the USSR appeared at this plant.

Hungary has been a member of the EU since 2004 and is part of the Schengen area.

Real estate market

real estate in Hungary in 2023

According to the European Commission, since 2010, housing prices in Hungary have increased 2.5 times. More real estate has risen in price only in Estonia (from EU countries).

The housing construction boom in Hungary was driven by record low interest rates on loans, housing subsidies and a jump in wage growth.

However, since the end of 2022, the situation has begun to change. The fastest inflation in the EU forced the Central Bank of Hungary to raise its key interest rate to 18%, which affected the demand for real estate. In the 4th quarter of last year, average prices for apartments and houses decreased by 2% compared to the 3rd quarter. In annual terms, however, a very significant growth of 16% was recorded. This is again one of the best indicators among the EU countries.

A noticeable trend in 2023 is the rapid rise in the cost of rent, especially in the capital, despite the fact that the number of rented housing is growing (+18% year-on-year). In Budapest in June 2023, the average rent was 230,000 Hungarian forints (616 euros) per month, which is 1.8% more compared to May and 15.6% more year-on-year.

A year ago, in the summer of 2022, Hungarian media warned that real estate prices could decline due to rising gas and electricity tariffs. These fears were not justified. Despite the fact that tariffs have increased, Hungarian consumers still pay a little for resources, especially if they fit into a state-subsidized quota. Let's say even the owner of an apartment of 100 sq. m. m can easily fit into the established framework and not overpay. According to Eurostat data for the 2nd half of 2022, Hungary is among the three countries whose residents pay the least for electricity.  

Hungary's growing real estate market has long been a magnet for foreign investors. Most of the buyers from non-EU countries are Chinese. Israelis, Britons, Americans, Russians, and Ukrainians are also actively acquiring real estate in the country.

Many invest in housing in Budapest or resorts in order to rent out short-term or long-term rentals in the future and earn income. Another motive is the desire to have a home for recreation and wellness in a convenient location in the center of Europe, so that you can come here yourself in the season. There are also those who move to Hungary for permanent residence and get a house here. Some choose the capital of Hungary to give quality European education to their children. Those who can afford to buy for your student or student apartment – usually a small Studio 42 to 45 sq. m.             

Budapest

Tourists celebrate the beauty of the Hungarian capital. Two once separate cities, hilly Buda and flat Pest, between which the Danube flows, are united into one. Today, 8 bridges can be reached across the river from one part of Budapest to another. The most famous of them – Chain – takes transport and human flows in the central part of the metropolis.

buy an apartment in the center of Budapest

The most expensive and sought-after real estate is located right here, in the historical center of Pest in the districts V,and also partially VI and VII, within the boulevard ring. (In Hungary, the districts of Budapest are numbered in Roman numerals, and the districts in other districts of the country are numbered in Arabic). The fifth district is considered one of the most desirable among tourists due to the fact that it houses iconic sights: the famous St. Stephen's Basilica and the square next to it, Vereshmati Square, where a traditional crowded fair opens before Christmas, as well as ancient buildings of different eras, numerous restaurants and cafes.

In this location, small, well-equipped apartments are popular, which are bought for rent to tourists. There are also large apartments under one cadastral number, divided into apartments for rent. Relatively newly built houses in this area are in particular demand, but there are very few of them.

apartments in the center of Budapest to buy

Renovated apartment of 60 sq. m. m in the center can be purchased for about 200,000 euros.

A few years ago, foreigners, including Russians, were happy to purchase real estate in the XIII district. In this place, on the banks of the Danube, for example, a large modern complex "Marinapart" is being built, which definitely deserved the attention of the investor. However, today in this area, as well as in the area of IX housing sales to foreigners without permanent residence have been suspended (although it has not been officially announced).

This restriction is applied by the authorities in order to give priority to the local population. In particular, young families are buying apartments here, which the state helps with subsidies.

Note that foreigners with a Hungarian passport are still entitled to purchase an object in these unofficially closed areas, but the status of a residence permit for suchthe operation is not enough. The municipal authorities do not give the go-ahead for such transactions, and a buyer who risks signing a contract may be left without collateral.  

One of the reasons that the Budapest authorities put up a barrier for foreigners was the rapid increase in apartment prices in this location. Say, 5 years ago, a well-equipped apartment of 45-47 sq. m. m in "Marinaparte" cost 135 000-150 000 euros, and today it is already offered for 200,000 euros.

Next to district XIII, district IV began to be built up. Several complexes have already been built there. It is accessible to foreigners, but it is already far enough from the center.

Close to the central ones there is another interesting, but rather heterogeneous area – District VIII. In the part of it that borders district V, there is a small "quarter of palaces" beautiful historical buildings built in the late 19th - early 20th century with large apartments, the prices of which are almost the same as in the elite fifth. Back in the 20s of the last century, officials settled in the VIII district and the "official part" began to form. In the Soviet 60-70s, there was an active development of the area, but today the houses erected at that time are outdated, housing in them is quite cheap and not popular. What can not be said about the newly appeared new buildings. For example, a complex commissioned in 2007 with a huge garden "Tsiprush" is on the ears of buyers. The apartment has an area of 50 sq. m. an apartment with a balcony and a parking space costs about 155 000 euros today. 

In District VIII there is a wonderful, super-modern, suitable place to live – Korvin Boulevard. Apartment 50 sq. m. m in this location can be purchased for 220 000-230 000 euros

real estate in the Korvin complex

There are also elite places in Be. For example, they include the very expensive district I on Mount Gellert. From here you can enjoy a magnificent view of the Parliament building towering on the opposite bank of the Danube - the symbol of Budapest. There is practically no new construction here, and prices for existing apartments are high.

Parts of districts II and XI are also considered suitable for living thanks to the metro and infrastructure. The latter is located opposite the fifth lying on the other side of the Danube, from which we began the description.

The second area is quite large. A significant part of it is occupied by low-rise buildings of the 80s. Three-storey houses for 4-6 apartments with their own fenced yard, garages are called "kotska" cube. This place is not a bad place for families to stay thanks to the fresh air and infrastructure, but the buildings themselves already have a rather tired look.

In the second and the twelfth district, located across the street from it, there are elite locations with villas worth from a million euros. The buyer can choose both a minimalistic modern house with a swimming pool and a renovated old mansion. There are few shops in this location, so residents go shopping by car. But the district has an advantage, thanks to which foreigners often settle here, namely, the proximity of international educational institutions. There is an Austrian, German, as well as an English school "Britannica".

buy a villa in Budapest

Another elite location with luxury villas – district II-A next to the second. This is already the very outskirts of the city. There is a French school here. And nearby in the suburb of Buda Nagy-Novachi there is an American one. You can get to it from here by car in 10-15 minutes.

Balaton and Heviz

Having moved to Budapest, foreigners with funds tend to buy a house or an apartment in one of the resorts of Balaton or Heviz. On the north coast, these are Balatonkeneshe, Balatonalmadi, Balatonfured, Tihan, Revfulep, Badachon, Sigliget and Kesthey. On the south –Santod, Siofok, Fognod, Tapolca, Balatonlelle, Balatonbolgar, Balatonfeldvar.

real estate on Balaton

Elite villages with luxury villas worth from one million euros have been built here and there near the shore. In addition, there are low-rise buildings in which luxury apartments are offered. For example, in a closed village with only four houses, a 2-bedroom apartment with an area of 57 sq. m is sold for 600,000 euros. 

Different types of low-rise buildings are common in Balaton resorts. Here you can buy a townhouse or an apartment in a duplex. So, the apartment has an area of 180-250 sq. m. an apartment with a garage and a small plot at a distance from the beach (20 minutes on foot) costs about 4500 euros per sq. m (from 810,000 euros).

Less expensive offers, there are, say, in the city of Siofok. Multi-storey complexes with playgrounds, swimming pools, underground parking are being built at this resort. They usually have small apartments designed with an area of 45-65 sq. m. Prices for such real estate start from 320,000 euros.

buy an inexpensive apartment on Balaton

The cost of housing in the area of Lake Heviz is lower than that of Balaton. The thermal reservoir also has a large selection of objects: villas, townhouses, apartments.

As a rule, real estate on the coast of Balaton and Heviz is not suitable for permanent residence. This region is characterized by a pronounced seasonality. In winter it is stormy, sparsely populated, and almost all shops and establishments are closed.

Can citizens of Russia and Belarus buy real estate in Hungary in 2023?

There are no restrictions for Russians and Belarusians in buying property in Hungary. However, as realtors note, the procedure for settlements with buyers from these countries has become more complicated. Today, funds do not reach directly from the Russian bank. Even if the money for the purchase of real estate came to a lawyer in Hungary, the bank does not record it to the account, as this contradicts the instructions issued from above.

Thus, payment under the housing purchase agreement is possible only through banks in third countries. As a rule, clients use banks in Armenia, Kazakhstan, Georgia, and some other former Soviet republics.

It should be noted that according to Hungarian law, all buyers of real estate from non-EU countries need a permit to purchase property from the Ministry of Internal Affairs. The inspection of the foreigner by the authorized body takes place after the conclusion of the transaction. The lawyer accompanying the transaction sends one copy of the contract to the Land Committee, and the second to check the client for reliability, which takes 60 days. This procedure has been adopted in Hungary for a long time, and it is perceived more as a formality. The exception is an attempt by a foreigner to purchase an apartment in the districts of Budapest XIII and IX, as we described above.     

Taxes when buying property in Hungary

Both foreigners and locals pay a one-time tax of 4% when buying real estate. As a rule, it is made about six months after settling into a new apartment or house.

There is no property ownership tax in Budapest. In all resort towns such payments are provided. Their size is assigned by the municipality.

Hungarian residence permit

Hungarian residence permit

A Hungarian residence permit can be obtained on the following grounds: family reunification, starting a business, studying in the country (even at language courses), teaching children, treatment. The last point is not as easy as it seems – numerous medical confirmations are needed.

A popular way to become a resident of Hungary today is to use a program for digital nomads. People working remotely for foreign companies must provide proof of income in the amount of at least 2500 euros per month for the last 6 months, as well as a valid employment contract.

In Hungary, it is possible to obtain a residence permit based on the purchase of real estate without restrictions on its value, but the requirements for the size of housing must be met, depending on the composition of the family (about 16-18 sq. m. m per person). The procedure is arranged as follows: a foreigner arrives, submits an application for a residence permit, provides the necessary documents and undertakes to purchase housing. He is given 3 months to do this. If he does not fulfill his promise, his card will be canceled.     

Summary

Hungary is a beautiful, distinctive European country that stands firmly on its feet and extracts possible benefits from its position and heritage. Russians are still warmly treated here, as well as other immigrants from the former USSR. This region is, perhaps, in the right proportion close and distant, so that neither kinship with all the vicissitudes, nor, on the contrary, alienation, traumatize.

If you have the funds to buy real estate, then Hungary is a good option for moving. As for the investment component,то такого роста, какой был в предыдущие годы пока, очевидно, не предвидится. Однако приобретение квартиры под сдачу в аренду при прочих предпосылках представляется целесообразным – пандемия отступила, поток туристов и студентов только увеличивается.

Благодарим за помощь в подготовке материала:

Илону Чик, менеджера компании Perfect Invest Hungary Ltd

Источники:

Евростат

World Economic Forum

Bloomberg

Budapest Business Journal

Hungary Today

Евростат

Kolesa.ru

Dailt News Hungary

Использованы фото, предоставленные Илоной Чик, а также из банка Deposiphotos.com

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