With house prices more than tripling from 2010 to 2024, reflecting an average increase of 218%. Budapest, the capital, has consistently outperformed other Hungarian cities, offering impressive returns for investors.
In the first quarter of 2024, the average price per square meter for newly constructed homes in Budapest rose by 2.8% year-on-year, reaching HUF 1.47 million. This upward trend is further supported by a robust rental market. Gross rental yields for apartments in Hungary averaged 5.75% nationally and 5.39% in Budapest during the same period.
The influx of international investors has played a pivotal role in this growth. In 2023, Hungary attracted EUR 13 billion in foreign direct investment, more than doubling the previous year's record. A significant portion of this investment was driven by Asian investors, accounting for nearly 82% of the total. This substantial foreign capital injection has been a key driver behind Budapest's booming real estate market.
Budapest's property prices are steadily climbing, thanks to foreign investment and economic growth. The city's lively culture, expanding job market, and the arrival of multinational companies make it a prime spot for living and real estate investment.
Looking ahead, the Hungarian real estate market is projected to grow by 5.87% between 2025 and 2029, resulting in a market volume of US$1.96 trillion by 2029. This positive outlook is bolstered by government initiatives aimed at stimulating the housing market. For instance, the economy ministry has proposed allowing private pension savings to be used tax-free for housing purposes, potentially channeling significant funds into the market and further driving demand.
However, it's essential to consider regulatory developments that may impact the market. The government is contemplating a moratorium on new Airbnb licenses and increasing taxes on short-term apartment rentals in Budapest. These measures could influence the dynamics of the rental market, particularly for investors focusing on short-term rental strategies.
In summary, Hungary's real estate market, particularly in Budapest, offers promising opportunities for international investors. The combination of strong historical growth, attractive rental yields, and supportive government policies contributes to its appeal. Nevertheless, staying informed about regulatory changes and market trends is crucial for making well-informed investment decisions.
By Empire Real Estate
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