The choice of Budapest to invest

The choice of Budapest to invest

Strong price increases on high-end properties, attractive yields, advantageous taxation... All these elements encourage wealthy clients to take an interest in real estate in the Hungarian capital.

An exceptional real estate heritage

The second capital of the Austro-Hungarian Empire, founded in 1873, Budapest has an exceptional real estate heritage. Located along the Danube, the city is enjoying a period of very strong growth, linked to its geographical location in the heart of Europe and a dynamic economy (3.4% growth), with an unemployment rate below 6.3% and one of the most attractive tax rates in Europe. In its latest report on the world's high-end real estate, the Global Property Handbook, BARNES placed Budapest at the top of the list of cities to follow for wealthy clients. It is therefore only natural that it should open an office there.

Price boom

Real estate prices have doubled in Budapest since 2014, rising from an average of €1,321/m² to €2,500/m². Apartments for renovation in excellent neighborhoods, such as the Opera House, are trading from €3,500/m². Properties in perfect condition reach €6,000 per square meter. In the neighborhoods around the Danube, particularly in the 5th arrondissement, prices have risen sharply (+35% in two years).

Attractive yields

The high-end clientele is mainly looking for large, fully renovated properties of 100 to 200 square meters. With 2 million square meters currently under construction or being renovated in the city, buyers are mainly interested in older properties, due to the low cost of renovations (around €2,000 per square meter), for investments with yields of around 7%, which are significantly higher than those in Western Europe. If you add the possibility of renting seasonally during the summer, yields can even reach 10%, or even 20% in some cases.

An increasingly important foreign clientele

The proportion of high-end foreign clientele is increasingly prevalent in Budapest, up by 50% compared to last year for residents outside Europe. These are mainly Chinese, Russians, Ukrainians, Israelis and Americans, looking for investment opportunities. In 2016, no less than 3,163 properties were purchased by foreigners, of which 1,213 were purchased by Chinese and 446 by Russians. The new Hungarian fortunes are becoming more and more present on the market. Less familiar with Western European practices and customs, they need full support when it comes to investing outside the country.

An advantageous tax environment

One of the main points of interest of Hungary for the international clientele is its taxation among the most advantageous in Europe. With a 16% tax rate on income, 10 to 19% on dividends and tax treaties with most Western European countries avoiding double taxation, Budapest is very attractive.