Budapest Property For Sale - Real Estate Investment in Hungary

Once you have made the decision to invest in property, your next task is to decide where to invest for the best returns.
Central and Eastern Europe clearly offer good returns, and they also offer relatively low risk and a clear exit route.

Below are the key reasons why we believe buying property in Hungary will bring you the expected results:

Capital appreciation can be 10-15% in some districts
Rental yields on new-built properties in preferred locations of Budapest average 6%
Any foreigner can buy real estate in Hungary. Capital gains taxes are declining and the government is actively encouraging inward investment and gentrification
Many major companies (e.g. Microsoft, IBM, HP, DHL, Electrolux, Nokia, GE) have moved to Budapest creating a major demand in the office and investment rental market
Budapest real estate prices are significantly below levels of other European capital cities. Since Hungary's entry into the European Union in May 2004, prices have continued their climb toward European norms.
Hungary is experiencing strong economic growth. The private sector accounts for over 80% of the GDP. Foreign ownership and investment in Hungarian firms is widespread, with cumulative foreign direct investment since 1989 totalling more than $23 billion.
Hungary is a parliamentary democracy, with a constitution dating back to 1949.
The legal system has been significantly upgraded in recent years, in compliance with EU membership and regulations. Article 7 of the Constitution states that the legal system of the Republic of Hungary accepts the generally recognized principles of international law.
The climate is temperate, with warm summers. Most of the country is a fertile plain around the two major rivers: the Danube and the Tisza that flow through the country from the North to the South.

High Growth

Post EU-accession macroeconomic factors indicate that this market is set for sustained capital growth over the next ten years:

GDP growth at several times the Western EU average, and massive EU-driven foreign direct investment
Many major international companies have moved to Budapest creating a major demand in the investment rental market and have all already invested in strategic regional centres
Financing is readily available, meaning low initial down payments and gearing
Significant returns are possible over a five to ten-year period
Wages are significantly lower than the EU average and are targeted to converg in about ten years. Hence property prices, which are currently a fraction of the Western EU average, are expected to increase as well.
You can purchase currently a capital city apartment for as little as 45,000 Euros
Property prices are currently rising by 10 to 20 per cent per annum in preferred areas

Low Risk

Adoption of EU-wide property ownership laws
EU membership security
Escrow or bank guarantees are easily accessible, securing your funds
Mortgage financing for foreign owners is now well established
Large local rental market of emerging middle-class tenants
Local buyers are abandoning the Soviet-style concrete blocks for the modern apartment developments of the type you will be investing in, while forward-thinking and futuristic city regeneration plans are driving migration to the capital

Exit Strategy

Property ownership in Hungary is about 90%, due to readily available mortgage financing and increasing wealth.
This means local demand for when you want to sell up and realise your investment. Locals are already buying 50 to 80% of all properties on our chosen developments for their own use.
Compare this to current ‘hot spot’ locations, where almost 100 per cent of new off-plan property is being sold to overseas investors. This scenario creates the very strong possibility of plummeting prices with no-one to sell on to when investor sentiment changes, as it inevitably will when the next property hot spot is uncovered.

Invest Now!

The time is right for investment in order to benefit from the future growth in Hungary:

Increasing wealth is driving huge growth in middle-class home owners and potential tenants; this means continued growth in demand for property.

Locals are leaving soviet-era high-rise blocks to live in modern apartment developments

The Right Property Type

Some property investors will tell you that successful property investment is based on three factors: location, location, location. Whilst location is a major factor in our selection criteria, so too is the TYPE of property.
Our research shows that the right type of buy-to-let property in Central and Eastern Europe in which to invest should be targeted at the local, emerging middle-class and professional-class tenants rather than ex-pats.
These tenants are now abandoning the communist pre-fab, high-rise so-called panel buildings in favour of modern apartment developments, in line with their personal aspirations for increased status and wealth.
Whilst it may be tempting to invest in a higher-value westerner-style luxury city-centre apartment to rent to ex-pat senior managers, our experience shows that this class of tenant is becoming increasingly rare as they return to their home countries to be replaced by local management.
High-end apartments are simply too expensive for the local rental market, and thereby endure long rental voids and are more difficult to resell since there is low local demand for them.
With this in mind, consider your investment exit strategy carefully. For example, typically 50-80 per cent of the apartments in the developments we promote are sold to the local owner-occupier market, so when you want to sell, there is an established, vibrant local resale market.

one2one property views property investment as a calculated business decision as well as an emotional reflex. We are prepared to help you in achieving an outstanding return on your investment through a clearly defined simple formula.