The Hungarian capital, Budapest, is evolving each passing day – if you are to wander around the city, in all the districts, you will find several construction sites, freshly dug pits for future structures or buildings under renovations. But, if we were to ask ourselves; where exactly is the city headed? Or better yet, what will Budapest look like after all these projects are done? Well, that, we will have to wait and see. For now, let’s see some of the projects that are lined up for Budapest!
Currently, the territory of Kopaszi dam looks like a good mini beach close to the river surface, and has an extremely huge area covered in green, tropical-like plantation, and also has a number of restaurants and bars that are lining up in wooden houses. But if we were to literally look at it a bit further, what we are seeing are massive grey pillars and blocks that are emerging towards the sky. This territory is brand new and it is known as Budapart, and is located near the riverbank, and is right behind Kopaszi gat. In this area, some of the main businesses that will be featured will include modern hotel catering facilities and office complexes.
The most fascinating aspect of this project is the MOL headquarters offices, which are in a 120 meters tall building. According to the critics of this particular structure, they say that it will spoil the traditional and monumental image of the city. Based on their argument, they say that the building will be visible even when you only want to wander at Gellert-hill. But hey! We are talking about growth here, so having such a structure in the area can only attract more businesses and people, which is a good thing as it will boost the economy of the area.
The concept of the ‘Southern Gate’ wasn’t released up until two years ago, and during that time, it was – and still is – one of the newest conceptions. When the news about the complete re-thinking of Inner-Ferencvaros, which is District IX, came out, and not forgetting the Northern region of the Csepel Island, it was widely published, and it became the center of attention to many investors.
The northern part of Csepel had been abandoned for years, and frankly, it is too close to the heart of the city to let the territory remain idle any longer. The riverbank side of Ferencvaros, that is after you’ve passed the massive & modern office buildings, the theater, and MUPA has really developed. Therefore, the joint renovation and connection of these two areas could only result in an enlarged downtown with superb infrastructure.
The Southern Gate plans include a bridge connecting Csepel and Ferencvaros river bank sides, an athletics arena, new apartments, dormitories, and a few office buildings.
This was probably the most controversial ongoing development project in Budapest. There were several demonstrations against the redevelopment of one of the largest green areas of the city. There was a civil group, referred to as the ‘Park Protectors’ who were constantly trying to withhold the destruction of the plantation, in an attempt to preserve as much green territory as possible. And in as much as there is need to protect the green environment around us, we have to admit that such a project can only do more good to the community given the fact more people will be employed, and also, after completion, the development will boost economic growth in the city.
Anyway, let’s ask ourselves, what exactly is planned to happen in Varosliget project? There are some facilities and institutions that are being constructed in that park. They include:
With these structures in the city, Budapest will be even more attractive than ever to local and foreign property investors.
Road Vaci – offices
When you take a ride along the super long Vaci Road, one of the things you will notice is; quite a number of office buildings and office parks and also a good number of run-down buildings, just lying there, idle. But with this particular project, a lot is expected to change. For instance, the idle building will be reduced and the more modern office parks will keep increasing. And even more contemporary, future workplaces and high-class buildings will emerge from the ground. This process is quite effective, especially with the reconstruction of the metro line M3, considering that the Northern line is already complete.
Also, the area behind the Westend mall is included in the process of being redefined, to turn it a place called to as the Granite Pole. The new complex is expected to serve a number of recreational purposes, new apartments, offices, and residences.
District VIII – inner Jozsefvaros
In the past, the 8th district hasn’t had the best reputation. Even with the changes and the modernization that took place, people still had a few negative thoughts about the region. But the construction of metro line M4 and the Janos Pal Papa square, have significantly boosted the district's reputation. Also, considering the green areas, fountains, the picture square, and the amazingly modern houses have attracted students, foreigners and families to live in the area.
Also, currently, there are plans to reconstruct the heart of the district – Orczy Square – which is a critical center of transportation all around the city. There is also the Blaha Lujza square, which is closer to the heart of Budapest and is one of the most significant junctions in the city, but as of now, it still doesn’t serve its purpose effectively. But with the new projects that are about to take place, the entire square will be redesigned, the Corvin shopping center will get a new façade, the underpass will be renovated, and the ground parking lots will be replaced with trees and other plants, and so are all the unnecessary concrete-covered areas.
The diversity in the Hungarian capital is quite fascinating, and the districts in the city will see a lot of improvements in the near future.
We normally ask ourselves: how can we invest in the real estate business? Or, is it a safe investment? Well, these are valid questions that need proper answers – after all, no one wants to see his/her investment go down the drain. Now, the European real estate market is considered to be one of the best in the entire planet, such that even during the turbulent times of economic recession, you will find investors looking to buy properties with the hope of things getting better. Year after year, despite several challenges here and there, the property business keeps generating more profit. However, the situation varies from country to country. If you were to ask property investors individually, they would tell you that some of the emerging European capitals are doing way better and are more profitable than the traditional cities such as Paris and London. And frankly, they may have a point.
Let’s focus on one of the underestimated cities in Europe, Budapest. Since 2014, property prices in the Hungarian capital has been increasing year after year. For instance, from 2017 to 2019, the prices increased by 35 percent, and as head into the future, market forecasts promise to continue increasing. What’s more, during the global financial crisis in 2008, Budapest remained as one of the cheapest cities. And after the economic recession blew over and real estate investors were looking to broaden their areas of interest, Budapest was at the center of the attention and media coverage.
Many consider 2014 to be the turning point for the real estate sector in Hungary. Loose monetary policy restrictions, combined with super strong macroeconomic performance has contributed to the growth of the housing industry in the country. In 2015, the capital of Hungary was ranked as Eastern Europe’s most attractive city. Because of these reasons and many others, Budapest has seen a great influx of foreign capital in the real estate sector. And when there was an upheaval of rental prices in other European cities, the prices in Budapest were still lower, which gave way to huge property investment returns. It was during this time when real estate investors compared Budapest to other European cities, where they figured out that the property rental fees were more attractive in Budapest.
Not only do new investors enjoy several favorable conditions, but those who bought property before the financial crisis in 2008 are enjoying it even more. After the crisis, there are so many people who expected foreign property investors to sell their properties in Budapest, only for reality to prove them otherwise. According to research done by Tower International – which is one of the biggest property management company in Budapest – investors who sold their properties was around 20 percent only. This finding was confirmed by several other property companies, including ManageRent Property Management Firm and EuroCenter properties. So, this means that there was no massive sale of properties as many people thought there would.
Something else that attracts investors to Budapest is the diversification of nationalities. A good number of property investors in Budapest are foreigners from different countries. The reason why foreign investors come to Budapest in large numbers is that they see great potential in the country’s real estate market. Also, based on the increase in housing prices in recent years, we can comfortably say that foreign real estate investors are pretty satisfied with the changes in the market. This is reiterated by the fact that the current prices have already exceeded the pre-crisis housing prices, which is proof that the market has been thriving ever since. Both local and foreign investors have been very active in the real estate market in recent years, thereby contributing to the growth experienced in the market in Budapest.
Rental apartments in Hungary, particularly Budapest has proved to be the most lucrative investment of all. The reason being, the current Hungarian higher education system has attracted a lot of students, both foreign and local. For instance, in 2019, the number of students studying in the country was estimated to be around 330000, where 300000 were Hungarian students and 30000 were foreign students, and most of these students were schooling in Budapest. The fact is, all these students, local and foreign, are looking for a place to stay in the city; in real estate, you would say that there are over 300000 tenants looking for places to rent.
Studio apartments still remain to be the most sought rentals by students in Budapest. The rental prices for these apartments have increased in recent years, where the average price for a studio apartment in Budapest is now somewhere between 350 and 500 euros depending on the quality and location of the apartment. Even though the most valuable apartments are in the immediate vicinity of the schools, most students prefer the ones in the 5th, 6th and 7th districts.
When compared to Hungarian students, the solvency of foreign students is pretty high. And frankly, the presence of foreign students in the country not only benefits the educational institutions but the real estate market and the economy too. The majority of the students live in rented flats, which is good news for investors in the city. According to research conducted in three universities – University of Pecs, University of Szeged and the University of Debrecen – foreign students spend over 22 billion forints on entertainment, housing, and living, plus tuition fees which are estimated to be 21 billion. Investors are aware of these facts, and that’s why they have been flooding the real estate market in Budapest, trying to capitalize on this amazing opportunity.
Additionally, the culture in Budapest also attracts property investors from all over the world. For instance, the price of tickets for the ballet or opera is only a fraction of other European cities. For this reason, people come to Budapest just to indulge in the top quality performances during the winter.
In conclusion, Budapest is an exciting, safe and fun place to invest, and with everything the city offers, it won’t be surprising to see the number of foreign investors increasing even more in the future.
Budapest has, of late, become a popular destination for property investors who are looking for investment opportunities that would high returns. These investments have restored the architectural prowess of the city as well as a thriving contemporary culture, which is driving even more investments thus boosting the demand for commercial and residential property. The Hungarian capital is divided into 23 districts, which are separated into 2 sections along the Danube River, referred to as Buda and Pest. Whenever foreign investors visit Hungary, Budapest in particular, they normally prefer to invest in the districts located in the downtown areas. Districts V, VI, and VII have some of the best neighborhoods in the city, and it’s where most investors hope to invest. These neighborhoods boast beautiful parks, dynamic bar and restaurant scenes, which are all nestled under the historical backdrop, making them the prime target for property investors.
To help you decide on where to invest, we have summarized the most popular districts among property investors. These are areas that due to their amazing neighborhoods and magnificent architectural composition, have become a prime target for investors looking to invest in Budapest. They include the following:
Districts in Pest
District V – this district is located at the heart of the capital, and it’s the commercial, political, financial a tourist center of the country. It is in this district where the Hungarian parliament is located, as well as Vaci shopping street and St. Stephen’s Basilica. This means that District V is where tourist attractions, fine dining, and well-kept neighborhoods come together. Property in this district has quite high demand, which makes it the perfect location to invest in real estate.
District VI – this is the other district that property investors are crazy about. The district is centrally located in a convenient location that’s lined with art nouveau residences and magnificent neo-renaissance mansions. The district has a bustling neighborhood which is a tourist hotspot, and, without a doubt, the most amazing location for incoming property investors. There are major renovations being carried out in the district, making it even more ideal for real estate investment, as properties will be in even more demand once the improvements are done.
District VII – in this district, its inner areas are known to be the historical Jewish quarter of Pest, which has transformed into the high energy nightlife hub it is today. Taking into account all the districts in Budapest, this is the most densely populated district, and being centrally located makes it the perfect place for short-term tourist rentals. As a property investor, investing in rental apartments can be the perfect investment, given the fact that tourists flood the district from all over the globe, and they will for sure need a place to stay when there are in town.
District VIII – the district is located on the outskirts of Budapest. It is less crowded, and if you are looking for a more affordable alternative to the central districts, then this is the place to be. As the district was initially built in the 18th century, and a suburb of pest, it has some impressive historical buildings that are just exceptional, like the original parliament building. What’s more, the district is in close proximity to downtown areas. Now, even you have to agree that this is an ideal location to set up a residential home, especially considering its quietness and easier access to the larger Budapest city.
District IX – this district has an upcoming and dynamic neighborhood, home to a community of students as well as families alike. The district plays host to universities such as Semmelweis and Corvinus, and also has a Raday Street which has restaurants, bars, and music venues, thereby creating a vibrant youthful ambiance. It also has the Great Market Hall as well as the open green spaces, and it very close in proximity to the city center, which makes it the ideal option for real estate investments. This also is the perfect environment to invest in rental apartments given the number of students it plays host to, and as you know, students need places to rent.
District XIII – this district was initially built as an industrial area, but later in the 1920s, it was rebuilt as a residential district. Given the District’s proximity to the downtown core as well as the Margaret Island, it has become a desirable neighborhood. Property investors, both local and foreign, are choosing to invest in the district due to its quietness as well as its magnificent architecture. It is located north from District V and it has a lot of Bauhaus style buildings.
Districts in Buda
District I – district I is entirely characterized by its rich historical heritage and its rolling hills. It home to Buda’s historic quarter. It also plays host to a number of famous buildings such as the extremely famous Buda Castle, the Fisherman’s Bastion, the Hungarian National Gallery and the famous St. Matthias Church. The historic buildings in the district led to it being referred to as the castle district. And as this name suggests, the neighborhoods are just timelessly beautiful, which is why property investors are so focused and willing to capitalize on this beauty.
District II – this is another peaceful and quiet district in Budapest. People looking to reside in a quiet environment, away from the busy downtown, should look into this particular district. The green spaces plus the quiet neighborhood makes it the perfect location to raise a family. What’s more, with an efficient transport system as well as the new luxurious condominium developments make it even more demanding for investors looking to set up residential properties in the region.
Basically, these are just some of the most popular districts in Budapest, which are seeing an increase in property investments due to their ideal locations and their magnificent neighborhoods. So, foreign real estate investors, who were wondering about the areas to invest in Budapest, with this information, you will be able to make a much more informed decision based on your preferences.
As an investor seeking high returns in real estate, then you definitely know of Budapest – as it’s one of the most favored destinations for property investments. Positive forecast in the future plus the high yield you get from investing in the city appeal to property investors from all over the world. Now, as you may know, foreign investors are completely new to the country and may not be completely familiar with the different aspects and terms used with regards to the buying and selling of properties in the country. The truth is, the real estate market in Hungary is pretty similar to other European markets, but, given the unique historical architecture as well as the continuous building maintenance in the country, there are certain terms used in the market that might sound strange to foreign investors. So, in this article, we will try to make things simpler for you by listing and explaining some of the common terms used in the real estate market in Budapest.
When comparing different properties in Budapest, one of the major aspects that you will have to consider is the type of heating system used. As the country becomes super cold during the winter, it is crucially important to have an efficient heating system that provides the required comfort, while maintaining a reasonable usage cost. So, the following are the common heating types mostly used in properties in Budapest.
Building central heating – this is the central heating system in a building. The building’s occupants are the ones who decide when to turn on or off the heating, and it’s usually turned on during the winter.
Central city heating – this is a heating system that is mostly operated by the capital’s municipality. The main disadvantage of the type of heating system is the fact that when adjusting it, it’s not possible to adjust for each flat separately – all the flats receive equal heating. And as some buildings really need the heating more than others, when you provide the heating equally, it may be uncomfortable in some of the flats.
Circo heating – this type of heating is individually controlled and is generated through heating water and passing the water through radiators that are installed throughout the entire flat. This heating system is controlled through a thermostat installed inside the apartment. This heating system is common in many properties in Budapest, as it offers the perfect balance between effectiveness and costs.
Gas convector heating – in this type of heating, there are gas convectors that are installed in the entire building and needs to be manually operated for it to provide the required heating. This type of system is quite old and is not that common though.
Electrical boilers – these boilers are used for heating in the building and also for supplying hot water throughout the building. In some cases, a gas-operated heating system provides heating in the building, while the boilers supply hot water. On average, the gas heating system is more reliable and offers better value than electrical systems.
Types of properties
As stated earlier, Budapest is famous for its exceptional architecture, breathtaking sights and also its rich history. Some of these houses were homes to known-figures and aristocrats, and once you are on the inside, you will see some indications for that in the lavish and splendid exterior and interior designs. There are also new houses in Budapest that are built in classical compounds, such as the famous Gozsdu court, which are pretty expensive, and popular when compared to other properties in the same region. The following are some of the terms used in the market that relates to the type of properties.
Classical properties – these type of properties are pretty common in the innermost regions of Budapest – areas such as district 5,6,7,8 and 13. A majority of these buildings are several decades old. There are some houses that have already been restored, while others are still in their original conditions. But when a property that is about to be sold is found in a classical building, the owners usually adjust them to meet the investor’s requirements.
Renovated property – this term stands for a property that has undergone renovation and refurbishment. The degree to which the property is to be renovated varies, where in some cases, the property will be renovated completely, while in others, the renovation is only cosmetic.
Newly built property – this one is self-explanatory. It refers to a property that has been built recently. This type of property is mostly found in Budapest’s downtown areas. Now, when it comes to new properties, you will normally find that their prices are higher, have newer heating systems and also have higher common monthly costs.
Brick apartment – frankly, properties that are within classical buildings are quite common are popular among foreign investors. The downtown areas of Budapest is where you will find these properties. Some of the reasons why the brick apartments are common among investors are: they are sturdy; they have authentic wooden floors that are of high quality; and also have high ceilings.
Panel apartment – these properties were built between the 1960s and 1980s, during the communist era. These properties are constructed with thin concrete panels and are mostly located on the outskirts of the city. For this reason, they are not that common among foreign investors.
Udvar apartment – some newly built properties and a majority of the classical buildings in Budapest have an inner courtyard, which is mostly referred to as udvar, with some of them facing these courts. This style attracts a lot of investors, and this explains why most of them love these apartments.
Common costs – now, when you hear the term common cost in Budapest, just know that it stands for the maintenance fee for the property. It usually covers all the costs that are associated with the purchase and ownership of the property.
American style kitchen – this term means that the kitchen is not separated from the dining and living room area, but is in an open space where the kitchen forms an integral part of the living room. This style looks spacious as there is no wall that separates the two.
In recent years, the real estate market in Budapest has done exceptionally well. Property prices have substantially surpassed the pre-crisis levels alongside market recovery. Since 2007 – when the country experienced a financial crisis, the real estate market has increasingly been getting busier, every year that passes. To be specific, 2013 was the year that the re-awakening of the Budapest real estate market started, gained momentum in the following year, and has never stopped since then. The central parts of Budapest were the areas that saw a steady increase in property transactions. The reason being, investors – both foreign and local – were aiming to capitalize not only on the short term yields but also property appreciation in the long run. From a national perspective, the western region of Hungary, as well as Budapest’s more central parts, have been thriving, while the country’s eastern region has seen a lower number of property transactions.
In a research conducted in 2016, it showed that out of all the transactions from that year, 38% of those transactions were in Budapest’s residential real estate sector. This research also revealed an interesting insight that both local and foreign investors prefer to invest in the Capital, Budapest, due to the substantial amount of profit that could be realized afterward, whether long term or immediate property value increases. From this research, we realized that smaller apartments, of around 100sqm, are quite popular among real estate buyers. The reason for this is the fact that they are sold in a more efficient manner when compared to larger properties. However, even though short term rentals have increasingly gained popularity, larger classical apartments that can be divided and rented out as separated smaller vacation apartments or rooms have also increased in demand, as they give the landlords immediate high yields.
As the market continues to boom, the prices of property have made a substantial jump. Considering the superb geographical location of Budapest – in the center of Europe; and the fact that in spite of this, it’s cheaper and affordable when compared to other major European cities; and not forgetting that prior to the economic crisis in 2007, property prices had soared to imaginable levels – just within a few years - it’s no wonder foreign property investors are now – when the crisis is over – flocking the Hungarian Capital, even more than in the neighboring cities, making the prices go up substantially. The real estate market in Hungary developed in parallel to the country’s macro-economy, which has enabled a solid economic improvement and growth in the labor market. What’s more, the government’s decision to incentivize property investors to enable them to purchase more properties has increased the demand significantly, which has resulted in an increase in property prices. So, considering these reasons and also eliminating the impacts of the crisis – which affected all European markets – Hungary, Budapest real estate market in particular, has proven to be a resilient and profitable ground for real estate development companies and investors.
The residential real estate sector in Budapest has performed beyond all expectations. In recent years, the market has flourished and has been booming in all regards, and if the massive number of transactions witnessed - from local and foreign entrepreneurs, private investors and developers – is anything to go by, Budapest – which accounts for most of the country’s GDP – is still and will remain the preferred choice in the region for real estate investments.
If the above reasons don’t convince you that Budapest is the best place to buy property, how about this: property transactions in the Capital are very safe and are also super-profitable, with an average return of 6% - 8% on long term rentals, and returns that are much higher from short term rentals – which can go up to 20% if the property is suitably located in a prime location. Also, Budapest is undoubtedly one of the most attractive classical cities in Europe, and it has been like a magnet for property investors for years now, which clearly showed the level of confidence investors have in the city’s property investments. Apart from the many expatriates, students, upper-class locals and tourists residing in Budapest, the city is also the preferred investment location for retiring western Europeans and Americans who pick the city due to its lower costs of living.
For foreign property investors, the chase after yield and the return on investment is what attracts most of them to Budapest, and is also what attracts any other investor to invest abroad. For instance, the rental yield from a long term rental is around 6% in the Pest area, while in the Buda area, it is averaged at around 7%. Typically, these yields are good, very good actually. And if you are to add any possibility of short term rentals, particularly during the summer, the yield will go up to around 10% or even 20% depending on the rental arrangement and location. Moreover, the cost of living in Hungary is pretty low, especially when compared to the neighboring countries. So, if you are an investor and you need to furnish or renovate the property, everything that you will need will be priced according to the economical index in the country, which means that the cost will be much lower.
Obviously, the real estate market in Budapest has grown, expanded, and has seen a substantial rise in property prices over the last couple of years, so you can’t compare today’s prices with the prices from last year or the other year. Yet still, considering the above review and also the current trends in the property sector in the country, the prices are still expected to go up even further. So, our advice would be to invest now, this is the best time to buy some properties in Budapest. The prices will keep increasing, and the longer you continue to wait, the higher the prices will get. Also, investors are expected to keep competing for favorable opportunities in the market, which will, in turn, lead to a steeper increase in property prices. If you decide to invest, ensure that you get a real estate consultant to help you with the process, especially if you are not familiar with the Hungarian real estate market.
As a student, we know that moving to a foreign country can be quite challenging. Before you start living your new exciting life, you will definitely need a place that you can call home, and that perfectly suits your needs. Well, there is no doubt that Budapest is one of the most vibrant cities in Europe, and it’s mostly famous due to its historic architecture, excellent universities, beautiful buildings, cafes, bars, restaurants, and its music and culture scene. But as a student, if you are to enjoy this city, finding the perfect apartment can be challenging, but at the same time, quite necessary. With this in mind, let’s make things easier for you; let’s see what you need to remember when renting an apartment in Budapest, so as to help you prepare for your search for the perfect home.
When renting an apartment, the time of the year you are renting really matters. For instance, in the apartment rental market in Budapest, the end of August, July and September are particularly busy. Reason being, this is the time that students, both local and foreign, get to know the universities in which they have been admitted. This boom is mostly experienced in college or universities’ neighborhoods or in districts where the universities are located. So, for property owners, advertising during this period, your property will be easily rented; that is to say, your property could be gone in a matter of days, or even hours. For students, the period between July and the end of September is the best time to look for an apartment, since you will find some good rental flats during this time. Still, you may move to the country at a completely different time, which is also okay. And even though you will have fewer choices, if you are lucky, you will pay less rental fees and you won’t be rushed to make your choice.
Secondly, when renting, pay more attention to the price of the property, in terms of rent and utility bills. In Budapest, property prices have considerably risen in recent years, and for students, unfortunately, rental fees have followed suit. For instance, a one-bedroom apartment in downtown locations in the city cost 400-500 EUR in rental fees per month, and it can go up to 800 EUR depending on the location of the building. Essentially, you can also decide to share the apartment with someone, which is also better since you can rent a bigger apartment, for instance, a two to three-bedroom apartment… The price for a two-bedroom range from 800 to 1400 EUR and a three-bedroom apartment ranges from 1000 to 1800 EUR, depending on the building’s location. In other words, before you settle for an apartment, make sure that you calculate the price to ensure it’s a fee that you can pay. Remember, property advertisements in Budapest never includes the total costs for renting the apartment, only the rental fee. There are utilities and common costs that should be included in the rental fee but they aren’t, and it’s important for you to figure this out before renting.
Thirdly, after you find the right apartment and you have the rental fee, you need to sign a rental contract thereafter. For foreign students in Budapest, renting an apartment is more advantageous as most of them want a place to stay for the four or so years they are in school. They don’t need to invest huge sums of money to buy property, and all the costs associated with the purchase. In an ideal situation, renting is beneficial to the tenant and the owner in the long run.
Fourthly, always remember to sign the tenancy agreement. There should be no exceptions about this, not even when the property owner is someone you know or even is your friend. You should never leave anything to chance as it is very dangerous and careless. You always want to be safe and protected, so make sure that you get a copy of the agreement, too. This protects you from being taken advantage of by the owner, where he/she may even disappear with your deposit.
Guideline number five, you should always ask for the property sheet, so as to ascertain the real owner of the property. As a matter of fact, you need to know if the individual renting his/her property to you is the actual owner, or you are about to be scammed. If the owner is a company, the managing director should be the one to present the legal papers to you for signing. If it’s some other individual, let them show you his/her documentation proving that he is legally allowed to act and sign on behalf of the company. The point here is to ensure that your investment is safe and that you are not conned. And something else, refrain from giving money to anyone before signing the real documents. As a matter of fact, if you avoid using cash, the better. Do not rush into this as you can lose money easily if you are not careful.
After all these are done, ensure that you ask any question that you may have with regards to your agreement for clarity. Ask about the rental fees, let the owner explain to you about all the utility bills that you will be paying while in the apartment. Also, let the owner tell you which bills will be paid by you and the ones that he will be paying. The point here is to avoid confusion where you may end up paying more than you should, and that’s why it is important for you to know this information. Thereafter, go through the agreement details such as: lease duration, rent amount, notification period, the deadline for paying the rent as well as the deposit amount. If you have any clarification needed, ask. If everything is clear, then the handover will be next, and from there, it will be up to you to make the apartment your new home. Learn your address and report it to the authorities. After that, live your life and enjoy this beautiful city as much as you can.
If you are considering buying some property in Hungary, and Budapest in particular, you will be pleased to know that the buying process might be easier than you might have anticipated. The rights of foreigners, and especially those from EU nations, and those of the Hungarian citizens are almost the same. All that you need as an expat is to have a permit, which will cost around 200 pounds and can be obtained from the district council. Obtaining this permit is considered to be a formality and will take a maximum of 6 weeks to be finalized. When talking about foreigners, we are referring to both EU nationals as well as non-EU citizens. However, it is important to note that this particular permit is required more from the non-EU nationals as compared to EU nationals. Reason being, since Hungary joined the EU, that is, back in 2004, it made it easier for the citizens from the fellow EU nations to invest in its property markets. This allowed EU nationals to own property wherever they want in Budapest since the country’s presence in the EU did put EU citizens on an equal footing and are treated equally as the Hungarian citizens. However, for the properties in rural areas, they are only available to Hungarians only at present. Below you will find the requirements for both EU and non-EU citizens for them to invest in the country’s real estate market.
For the EU nationals, once you’ve decided that you want to buy a property in the Hungarian capital, Budapest, there will a series of straightforward events that will have to take place so as to make you the rightful and legal owner. It is also important to note that in most of these process, you will definitely require a lawyer and a realtor company who will help you in every stage in the transactions. The realtors should preferably come from Budapest, as they are the ones to help you locate the ideal place to buy some property, considering that they know the city better.
This entire process takes a maximum of 60 days to finalize, that is, from the contract signing day all the way to the closing process.
Now, with regards to the non-EU nationals, the process is a little bit different and may take a longer period to be finalized. It may take a few more weeks, but the good thing is, the entire process is bureaucratic, and hence you won’t need to stay here, in Budapest, or be present during this period. The Hungarian market is quite favorable towards foreign property investors, which makes the entire process swift and easy to execute, even though it takes time. So basically, the process is as follows:
All in all, whether you are an EU or non-EU national and you are interested in investing in the property markets in Budapest, Hungary, you are more than welcome to seize the opportunities. Budapest, just like its neighboring cities in the EU, is one of the best destinations for property investors.
As you probably may know, real estate investments can be tough to navigate, especially if you lack the know-how on how to get started. In the real estate sector, there are several pitfalls that could make you lose money fast, especially if you are a first-time real estate investor. By fulfilling your due diligence plus a little guidance, surely you can easily steer clear from the common mistakes mostly made by first-time investors. The following are the most common mistakes that hinder successful property investments in Budapest:
Poor planning – If you are planning to venture into the real estate business in Budapest, you need to have a plan, and not just a plan, a good plan. Property investment can get pricey, and therefore, deciding to buy a house on a whim is poor planning, regardless of how good the deal is. Without proper research and planning, you might find yourself paying more money than you should have on a house that you didn’t need or even a low-quality house. So, when buying a house in Budapest, think about the upkeep, maintenance, and the cost of fixing it up, as well as all the hidden costs associated with property investment. Truth to be told, property investments are quite big, and when you are foreign investor looking to invest in the Hungarian capital, you should ensure that you carefully consider all the essential aspects related to the investment, and more importantly, ensure that you have a good plan.
Not doing enough research – So, here is the thing, there are several nuances that come with owning and selling property in Budapest, and this is what makes property investments to be quite complex. Depending on the property, being aware of the zoning laws or requiring permits for landscape changes may be a necessity. The property you are looking to buy might be located on a disaster-prone environment or a floodplain, which will have an impact on the insurance premiums you will have to pay. As well, the property might have insect infestation or perhaps someone died in that particular house (you may never know). You see, all these details are crucial and since they may not be included in the agreement between you and the seller, there is need to do more research on the property before committing money into it. Not doing enough research on the property you are about to buy maybe one of the worst mistakes you can ever make as an investor, particularly considering that you will be spending money in a foreign country. What’s more, you are new in Hungary, Budapest in particular, you know nothing about the real estate market there, therefore, you need to do a deep dive on the market and the property you are about to buy. This will help you determine whether there are any structural changes that need to be carried out on the property. Also, researching the market in Budapest will help you understand the value of your investment.
Hiring the wrong people – This is another mistake that foreign investors make when buying properties in Budapest. Property investment involves a number of processes and is quite complex, which means that you can’t do it all by yourself. You will need to hire a team of experienced realtors to help you get the best deal possible and in an ideal location within the city. These are the people with the knowledge that you desperately need, and by hiring the right people, you are guaranteed of a successful investment. Now, the problem comes when you hire the wrong people. By hiring the wrong people, you risk losing your money and your property. As well, you may end up paying more than you normally should. So, when doing more research on the properties and the real estate market in Budapest, remember to also research the real estate agency you want to hire to help you with your transactions.
Having a get-rich-quick mentality – Many investors, both local and foreign, have this believe that property investments lead to instant wealth. To be honest, this is far from the truth. This investment takes time and money before they can give you good returns. It will take great patience from you if you are to get anything from your investment, especially if you are considering investing in Budapest. You may find yourself holding your property for a while before selling so as to get better returns. Therefore, as a foreign investor eyeing the Hungarian market, you should take your time and also ensure that you put in extra hard work, and then, the payoff will be worth it. Remember -success takes time- so don’t rush it.
Spending too much – This is a habit that is most common among foreign real estate investors. Due to the desperation of owning property in Budapest, foreign investors will pay a lot of money to ensure that it happens. These kind of purchases are dangerous as you can lose your money in an instant. Anything making you pay more than you anticipated for your property should be avoided in all ways possible. You may find that there are some costs that the realtors forgot to disclose in your initial agreement that eventually emerges. Therefore, in the event there are too many problems with the property that requires you to spend on, you should avoid buying that particular property since you will end spending more money than you had planned for initially.
Ultimately, for you to succeed in the Hungarian property market, it is necessary that you play your cards right. Ensure that you have a good plan in place and also make sure that you do your research diligently and thoroughly. Property investments are quite costly, and when done right, they will generate good returns in the near future. Simple mistakes can cost you a lot of money, so make sure that you avoid them at all costs. Take appropriate steps and you will be headed in the right direction – towards successful real estate investments.
Property investments in Hungary, and particularly Budapest, have been quite popular among many foreign investors for many years. By itself, this fact alone is a perfect indicator for the stability of the Hungarian real estate market when compared to other European markets, and also for the business potentiality that the Hungarian capital offers global investors who choose to invest in the city. The main reasons which makes Budapest this popular in real estate investments includes; availability of international universities, its strategic location, that is, in the heart of Europe, its tourist attraction sceneries, low cost of living, easy processes of owning properties alongside an active encouragement from the government through incentives, as well as the constant appreciation of property prices.
Now, from a statistical viewpoint, the property rental market in Budapest is hugely active, which presents the investors with both short and long term rental benefits. In the last couple of years, there has been a steady and steep increase in property values, especially in the regenerated areas in the city, which in turn led to extremely high profits for property owners. A major factor that has contributed to this increase is the limited number of available rental properties in Budapest, which is also attributed to the small sizes of the city’s most central areas. Due to this, you will find that in the most sought-after areas of the city, there are no new constructions planned, resulting to a situation whereby, there is a high demand for rental properties in the center of the city on one side and a limited supply of the same on the other.
Being centrally located, the Hungarian capital, Budapest, is a lively cultural and business center and one of the largest cities in Europe and is occasionally referred to as the ‘Paris of Eastern Europe’, due to its extraordinary sights. Property prices in Budapest have increased over the last couple of years, as the country is trying to establish itself again from the global financial crisis that began in 2008. During this period, the city suffered from low-interest rates, lack of incentives to investors, both local and foreign, and also from low property supplies, which in turn soared the prices across the city. But the market has seen prices increment of around 20% since then and also promises a brighter future for property investors.
In all honesty, investing in the property market in Budapest has proven an intelligent decision to many investors, since it balances between low risk, stability and high yield. Foreign investors who invested in the real estate market in Budapest after the crisis in 2008 are today seeing a significant appreciation of property prices, which to them, might just be a bonus considering the fact that they rented their property the entire time during that period, since the rental market in Hungary, Budapest in particular, wasn’t affected by the micro effects that much. As well, on a regional collation, Budapest can be compared to cities such as Prague and Warsaw where the prices of properties are substantially higher. Therefore, when you look at it from the appreciation perspective, purchasing a property in Budapest is the best decision as it will bring you much higher returns when you sell it. Moreover, contrary to the other regions’ governments, the Hungarian government blocked the country’s borders during the most recent immigration crisis, thus guaranteeing a higher level of security and also a homogenized population, which are all favorable to property investors.
The other benefit is the presence of some of Europe’s most famous universities in the city, where foreign students attend to gain advanced degrees in areas such as veterinary, engineering, medicine, psychology, business management and many more. These professions take years to be completed and based on the country’s inflation, the tuition fees have increased in recent years, and so are the rental prices. This has led to more and more students buying properties in the city during their 3rd or 4th year into their degrees, which has enabled them to save on rental charges, finance their academic tuition, and most importantly, own a property in Budapest after they complete their studies. By them owning some property ensures the growth of the real estate sector in Budapest and Hungary in general, and the investors will have many clients to sell their property to. What’s more, from a risk management perspective, property investments in Budapest is a low-risk opportunity due to the massive economic growth experienced in the country.
On the downside, there are a few barriers to property investment in Budapest, and especially for new investors. They include:
So, in conclusion, we can say with the highest degree of certainty that buying a property in Budapest is the best investment move you will ever make as an investor. The property market in this city is at its best as the number of expatriates, tourists, students, and visitors who are coming to this city have risen in recent years. This has, therefore, increased the number of investors buying properties in Budapest, which makes the city the ideal place to invest in. As a matter of fact, the city is growing and pretty soon, everybody will want to own some property in it, and those who have moved the first and already have bought some properties will be the happiest and the luckiest people in the country.