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invest in budapest

The hangover of 40 years of Communist rule has been replaced by a stable thriving democracy within Europe.

Hungary is situated in the heart of Central Europe and Budapest is its cosmopolitan capital. The hangover of 40 years of Communist rule has been replaced by a stable thriving democracy within Europe and has dug a fertile ground for multinational companies to locate their regional headquarters here. The inflow of international employees for these companies is resulting in a high demand for rental accommodation.

Typical levels of appreciation for properties in well-located areas have been seen at 10% up to 15% per annum, and coupled with an average rental yield of 5% and 7% for an apartment.*

“Budapest… is reminiscent of Paris, yet with the dynamism and bustle of a new and emerging Europe” (The Business.)

Why invest in Budapest?

According to information from the Hungarian Ministry of the Interior 25,000 foreigners have purchased real estate in Hungary over the last four years, 6,000 of which did so in the last year. What attracts these investors to Hungary and Budapest?

1. Property Prices

Property prices in Hungary are a fraction of those in most Western cities. Prices in Budapest are at least of fifth of those in Dublin and London. The average price for a one bedroom apartment in Central Budapest is approximately €60,000 (HUF 16.4 million).**

Many observers compare Budapest with Dublin in the mid-nineties where the Irish economy began to grow rapidly due to increased foreign direct investment, EU structural funds, and an educated work force. Between 5 and 10 years many expect prices in Budapest to approach those of Dublin. Check our property investment deals in Budapest here.

The population of Hungary is approximately 10 million, 2 million of which live in Budapest.

2. Budapest is a Cosmopolitan EU Capital City

In May 2004 Hungary joined the EU, since then Hungary has proven itself as one of the most dynamic new EU states. The population of Hungary is approximately 10 million, 2 million of which live in Budapest. Similar to Paris and Vienna Budapest is a visually stunning city. Called the ‘Pearl of the Danube’ Budapest is full of beautiful buildings, monuments, parks and intimate libertine cafés. The city is attracting new residents from not just within Hungary but also surrounding countries including Italy, Germany and Rumania. As one commentator put it “With it’s elegant buildings and its pavement cafés its reminiscent of Paris yet with the dynamism and bustle of a new and emerging Europe.”

Unlike many ‘Hot Spot’ locations, Budapest is a proven property economy.

3. Security of Investment

Compared to a lot of new “Hot Spot” property locations, Budapest is a capital city and continues to be one of the most secure and consistent property performers: The reasons for this include:

Gross monthly income: 2,430 euros

It is a Cosmopolitan City with similar characteristics
to Dublin, London & Paris

Growing demand for rented accommodation from the
local and ex-pat market

Good quality builders with bank guarantees on all payment received

Steady growth in Prices

Improved mortgage facilities for International buyers

English speaking lawyers and rental Property Management Companies

For frequently asked questions abinout investing in Budapest, click here

Some facts about buying in Hungary:

As an individual you are limited to two properties only. In order to buy more than two a company will need to be established. However this is not a complicated process and IPP’s partners can assist investors with this.

Mortgages facilities are available to foreign buyers from between 50 to 70% of the property value.

There is no stamp duty applicable on new properties if the property value is below €60,000 approx. The rate is 6% for property priced above €60,000 and less than €120,000.

If you decide to sell your property capital gains tax is 20% for an individual and 16% for a company. However this rate is reduced by 10% every year after the 6th year of ownership.

As an owner renting your property you do not have to pay community fees, these are paid by the tenant.

For more information about buying property in Hungary please contact us today

For a list of our recommended property investments in Budapest click here.