With a population of over 10 million inhabitants, Hungary is one of the mid-size former eastern-block countries regaining independence after the fall of the communist regime back in 1989.

Since then, the fundaments of the market economy were established and continuously improved in order to meet Western European standards in the shortest possible time. Interrupted by smaller ups and downs, the country is continuously flourishing, having an average GDP growth during the last years of 4% per annum and above.

Hungary joined the NATO in 1999 and the European Union in 2004 gaining access to solid development resources to be utilized in the coming years. The average GDP per capita calculated on purchasing power parity was almost USD 20,000 in 2007. Hungary is planning to introduce the Euro within the next few years.

For more information on Budapest, please click here.

Budapest, the capital city of Hungary, or as often called the “Pearl of the Danube”, is listed as one of the world’s most beautiful cities on the UNESCO’s World Heritage list. Located in the north of the country, Budapest straddles a gentle curve on the Danube: one third on the western bank is hilly Buda, two thirds on the eastern bank is flat Pest. Budapest has continuously gained on importance over the years. With almost 2 million inhabitants, Budapest has become one of the leading capitals in Central Europe and a significant metropolis on global level as well.  

After joining the European Union in 2004, Budapest has experienced a rapid change in most aspects of the daily lifestyle. Leaving behind the communist past, Budapest is on its way to move onto a cosmopolitan atmosphere with a multicultural approach, becoming one of the leading 21th century European cities.

With countless development plans and infrastructures to come, Budapest is forecasted to follow the prospects of other Spanish and Irish cities, where real estate markets experienced the highest capital appreciation over the last two decades. Since Budapest is becoming more and more of a regional hub in the Central European area, a great number of the large multinational companies locate their headquarters in the city. This results in an increased demand for property rentals from corporate and individual tenants providing a continuous demand on the rental of investment driven property acquisitions.

For more information on the districts of the city, please click here.

Budapest comprises of 23 independent districts, on both sides of the Danube. From the classical XIX century aristocratic buildings in district V and VI to the new developments in district VIII and IX, all districts offer good investment possibilities, either with high rental returns or as areas with huge capital appreciation.

Please find below a summary of the most relevant real estate investment areas of the city.

A few reasons why both professional and private investors like to invest their money into Hungarian real estate investments:  

• A remarkably high, up to 30% per annum return on investment
• Stable market economy but still an over-average growing potential
• Stable and investor friendly legal framework
• Great variety of tax structures to meet maximum profit on investment
• The downtown area of Budapest is currently being rediscovered under local population making the renting probability of investment purpose real estate acquisitions higher than ever
• Due to European Union and local government funds the monumental areas of Budapest are under continuous renovation and the infrastructure is under ongoing modernisation and capacity extension
• Hungary and Budapest is strategically located in the heart of Eastern and Central Europe and operating as a commercial crossroad between East and West, with one of Europe’s most important waterways, the Danube, cutting through the country.
• With a rich and more than 1100 hundred year old history and culture, Hungary has a highly educated and motivated work force and this is one of the most important reasons why major corporations choose Budapest as their regional center.
• Budapest property prices are approximately 25% lower than those of Prague and Warsaw, and 5-6 times cheaper than prices in major western European countries.
• For private investors the Hungarian State offers a very tax-efficient tax scheme for real estate investments: From 1 January 2008, individual property investors pay no capital gains tax in Hungary on any residential property they own for 5 years or more.
• In September 2007, the EU approved a total funding of €25 billion to be invested in Hungary by 2013 to accelerate economic growth in the country. The effect of this huge funding influx has already made a big difference to the Budapest property market.
• Hungary aims to adopt the Euro within the next few years. This will mean lower interest rates, cheaper mortgages, more inward EU investment in the city and consequently, prices will experience a boom.
• Comparison of the average new flat prices in EUR / square metre (www.portfolio.hu October, 2007)
  1500-2000 EUR Budapest
  4000-6000 EUR Prague
  3000-4000 EUR Bucharest
  2000-2500 EUR Bratislava