The Hungarian residential property market continued to grow in 2021, although growth decelerated from previous years due to the COVID-19 pandemic and its ensuing lockdown measures. Nevertheless, the market is well positioned to recover once restrictions are lifted and as economic conditions improve. The Amazing fact about Real Estate Market Trends in Hungary.
The retail market remained resilient throughout the COVID-19 pandemic, with turnover in physical stores growing significantly. Online sales also grew, although their share of total retail turnover declined slightly. The market is expected to continue to perform well in the short term, supported by the planned investments from the Next Generation EU Recovery Fund and the new Multi-annual Financial Framework (MFF), which will provide additional stimulus for investment spending.
Production continued to grow in Q3 2022, despite the pandemic in the industrial sector. Domestic demand has improved considerably, supported by easing restrictions and implementing an effective vaccine. The GKI business sentiment index has already recovered to pre-pandemic levels, and occupier demand is expected to improve further once restrictions are eased and as the economy recovers.
Office markets in Budapest have shown remarkable resilience, even during the most challenging pandemic. The total vacancy rate remained below 10%, and net take-up was strong. During the quarter, most leasing activities were driven by professional tenants. Vacancy rates are expected to remain low as new supply continues to be delivered to the market.
Retail and leisure sectors have seen the most robust footfall since the end of April, largely thanks to the significant easing in government restrictions. In fact, according to a Google study, office use has reached levels close to the baseline, with the majority of occupiers still choosing to work from home for 1-2 days per week.
As a result of the improving economic outlook, interest in real estate has been increasing, especially in the residential market. Investors are seeking long-term opportunities to take advantage of the stable yields offered by the country’s robust economic performance and its relatively low-risk profile.
The housing market is one of the most critical sectors in Hungary, with almost all households owning their homes. The country has a favorable macroeconomic environment is highly attractive to international investors. Its strong GDP growth, low debt level, and relatively stable forint/euro exchange rate support a sustainable increase in the value of real estate assets.
Foreign buyers are showing increased interest in Hungary, mainly in Budapest’s capital and towns/villages around Lake Balaton. The purchase of real estate in Hungary by non-Hungarian citizens requires a particular approval procedure, so it is advisable to seek legal advice before purchasing. Buying property as a private citizen involves a complex process, and it is usually recommended to establish a limited company registered in Hungary before proceeding with the transaction. This will allow the property to be purchased with a private contract countersigned by a lawyer. It is also possible to acquire properties in the name of a company established abroad.
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