property in hungary an overview
News Posted On: 07 March 2009
At best, Hungary is a paradox and hard to understand from the investment point of view! This landlocked country has some of the best tourist spots, yet tourism has not attained the peak it should have.
Hungary is one of the fastest growing economies in the EU, yet the property stock in real estate has yet to expolde. We’ll try to understand the country a little better and hopefully, after reading this article, you will appreciate why property investment in Hungary is one of the best options in the EU.
Attractions of Hungary
Hungary is a multi-cultural destination, with a tinge of many cultures left behind from its former rulers. At different eras throughout history, the country was ruled by the Magyars (a Finno-Ugric tribe that arrived via Russia in the 9th Century), Arpad Dynasty, and Mongols. The multiculturalism is also attributed to the shared borders with countries like Ukraine, Slovakia, Romania, Croatia, Austria, Slovenia, and Serbia.
Since Hungary is a landlocked country, the Ocean tourism is a non-starter. However, this doesn’t mean that the country has dearth of tourism potential. In fact, one of the highlights of Hungary is the water-features dotting the country. Lake Balaton is known for its hot medicinal springs.
The River Danube runs in the middle of the capital city of Budapest, and divides it into two parts – ‘Buda’ and ‘Pest’. The River Tisza is regarded as one of the finest rivers in Europe for fishing.
Hungarian vineyards, orchards and National Parks offer a special treat for the visitors in this country. Hungary is also known for being home to internationally acclaimed writers, artists and musicians due to its rich history and culture that promoted intelligentsia to the hilt.
The modern Hungary, including the capital city of Budapest, will welcome you with trendy nightclubs, bars and discotheques.
The Börzsöny, Pilis and Mátra ranges north of Budapest are famous for hiking and skiing.
Property Investment in Hungary
As we can see that the country has lots of tourism potential. Therefore, any kind of investment in vacation property around the country should yield rich dividends.
Though the country became a member of European Union in 2004, the residential property market has not peaked as yet. In fact the recent years have witnessed a fall in property prices. However, commercial and industrial property in Hungary has shown remarkable strength, growing in leaps and bounds, and it’s just a matter of time before the residential property sector also catches up with other properties types in Hungary.
At current prices, you can hope to land yourself a decent apartment in Budapest for as little as £26K. Villas in Budapest command a higher price. But if you compare the size and location of property, then a Villa for £70K is not a bad choice in Budapest.
The overseas property investor, particularly from Ireland and the UK are flocking to Hungary purely on speculative instincts. The fundamentals of Hungary are too strong to ignore in the wake of the sluggish residential property market.
Moreover, the government is doing its bit by relaxing the property owning laws of the country to bring them in consonance with the changing global order.
Why investment in Hungary makes sense?
The prime reasons that compel you to invest in Hungary include –
1. One of the fastest growing and stable economies of Europe.
2. Property appreciation averages 16% annually.
3. Rental yields in Budapest averaging 6% annually.
4. Any foreigner can buy real estate in Hungary.
5. Capital Gains taxes are declining.
6. Proactive government promoting the investment scenario in the country.
7. Several multinationals have already set up their shops in the country in the hope of capitalizing on Hungary’s economic might.
8. Excellent cultural environment on offer that encourages overall development of personality.
9. Low property prices.
10. Stable democratic government enjoying the full support of Hungarians.
11. Inviting climate with fertile plains offering ample opportunities for nature lovers.
12. Very well connected with budget airlines taking off regularly for major European and global destinations.
13. Historic roots of the country are always attracting researchers and historians from around the world and thus, make the country a richly deserving one from the investment point of view.
Buying a property in Hungary
The legal formalities of buying a property in Hungary should be best left to an expert real estate agent or an astute lawyer who understands the technicalities of property deals in the country. Though the government is trying its best to streamline the process but still there are lots of formalities before the property actually changes hands.
There may be some routes, like establishing a Limited Liability Company, which make things easier for the property transfer. But for an expert opinion, you need to rely on a good local lawyer or real estate agent. For further details on buying a property in Hungary check out our Buyers Guide to Hungary.
In addition to offering property for sale in different locations in Hungary we also have at your disposal a list of other useful tools to help in your decision making when considering buying a property in Hungary :
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