Published on 05 November 2005 at 03:21 pm
Filed under: Europe:- Hungary Property Guides » Hungary Property Investment
Property investment in Hungary is mainly centered on the capital city of Budapest where prices are currently at least 25% cheaper than similarly attractive European cities like Prague, and where property prices in the most desirable districts rose by up to 15% last year.
The Budapest real estate sector offers investors long term rental income generating opportunities as well as medium to long term capital growth potential. And those looking for an emerging market opportunity within an emerging market economy could consider targeting the tourism and second home markets in Hungary for profit and income as well.
Since Hungary joined the European Union back in 2004 the country has seen a 0.8% increase in GDP growth rate, a 1% increase in the rate of industrial output and has seen foreign direct investment surge as international confidence in Hungary grows. Of the foreign direct investment flowing into Hungary, 70% of the money is targeted on Budapest; furthermore Budapest is where 60% of Hungary’s commercial activity takes place.
As a direct result of these facts Budapest’s population is growing rapidly annually as more jobs are created, as more companies expand and establish in Budapest and as more professionals and workers arrive from other Hungarian regions and from abroad.
This growth in population is already pushing up the demand for property to rent faster than new housing units are coming onto the market. Furthermore, of the established apartment real estate available in Budapest, in excess of 30% of all units require major renovation so the demand for quality accommodation is intense.
Rental rates have been rising in Budapest for the past few years already and as the local population’s purchasing power begins to increase as a result of having access to more, better paying jobs, so this increase can continue to be sustainable.
Brand new off plan property developments in Budapest are selling out rapidly upon release. Buyers consist of overseas real estate investors seeking to buy low and flip on completion, property investors buying multiple units to rent out for an income and there is also a strong local demand for property to purchase which gives an investor a strong resale domestic market. This means that the profitability of a property investment made in Budapest can be realized by reselling - there is nothing worse than owning a property that you cannot resell after all!
In terms of other opportunities for property investment in Hungary, they exist in all five regions of the country namely Budapest and surrounding suburbs, Balaton, Puszta and Lake Tisza, Pannonia or Transdanubia and Eger-Tokaj Hilly Wine Region. Hungary has the largest incidence of second home ownership of all Eastern European countries because it is an incredibly beautiful country, an easily accessible country which borders Austria, Slovenia, Croatia, Serbia and Montenegro, Slovakia and Ukraine and a country that enjoys incredibly cheap flights to and from the UK. Tourism in Hungary is also growing and investment into the tourism sector is encouraged with the Hungarian government offering tax incentives to investors who commit for the long term.
An investor could buy, renovate and resell properties to second home seekers, alternatively a property investor could buy to let to the tourism market or even invest in hotels and tourism amenities and facilities in Hungary for long term income and profits. Quite simply, a property investor looking for an attractive, economically stable country offering a broad range of affordable real estate investment opportunities should consider investing in Hungary.
Europe:- Hungary Property Reports
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