Center of the Europe equals center of the world, Budapest consistently ranks as one of the top destinations for tourists due to its rich history, vibrant culture, and world-class events all year round.
Housing Market is Booming!
Property Prices in Hungary specially in Budapest are rising rapidly due to positive economic conditions and government programs that are making home buying more accessible. In Budapest, this positive trend is further accelerated by an increase in tourism, a rising international student population and a recent influx of expats moving into the city.
During the second half of 2018, the Hungarian National Bank’s house price index shows that residential property prices rose by 16.2% year-on-year (12.7% adjusted for inflation) in Hungary as a whole and 20.2% year on year (16.6% AFI) in Budapest during the same time period. Credits for new homes increased by 80.1% in 2017 compared to the year prior.
According to the Global Residential Cities Index, in the last quarter of 2018, Budapest had the fastest growing property prices of any city in the world. Monthly rents in Buda range from EUR 9.50 to EUR 11.50 per month per sq.m and EUR 10.60 to EUR 11.00 per sq.m in Pest. Average rental yields in the capital are around 5.5% but investors can expect rental yields greater than 8% in high demand areas.
Hungary is one of the fastest growing countries in the European Union and has experienced strong economic growth with GDP rising by almost 5% in 2018. Budapest is the economic powerhouse of the country and the number of young professionals and expats moving into the city has rapidly increased in the past decade. The city is also becoming an increasingly popular destination for local and international tourists as the number of tourists increased by over 5% to reach a record high in 2018.
There is freedom for both the landlord and tenant to negotiate the terms of the rent such as the deposit amount, any increases in rent and other conditions. New tenancies are unregulated in Hungary with the exception of municipal and state property. Landlords are also protected by the Lease Act in cases when a definite term is defined in an agreement. The Lease Act stipulates that the landlord can terminate a contract with a tenant if the tenant breaches the following obligations by:
- Failing to pay the rent by the agreed date.
- Has an antisocial lifestyle that breach the agreed on requirements.
- Damage the property or use the property for unintended purposes.
- Fails to perform their essential contractual commitments.
Budapest is amidst a cultural and economic renaissance that is driving new property investment and increasing profitability in the real estate markets. Major development projects are underway that are renovating and changing the architectural landscape of the city with carefully implemented regulations ensuring that developers create a liveable environment for future residents.
One such project is BudaPart- one of Europe’s biggest residential projects that spans a total of 1.5 million sq.m. The entirely new neighborhood will be home to apartments, shops, restaurants, and office buildings and will be located on the bank of the Danube in District XI.