Foreign Investors Back in the Hungarian Property Market

The presence of foreign nationals in the Hungarian real estate market has strengthened again, with 23% more foreigners investing in Hungarian property in 2021, according to Duna House data, which show that 2,716 applications for property purchase were submitted by non-EU nationals last year. An important factor is the deterioration of the value of the Hungarian currency, the forint.

The real estate firm estimates that there were nearly 151,000 transactions on the Hungarian real estate market last year, of which 2,716 were applications for real estate by foreigners. The lowest point in the last four years was in 2020, when only 2,200 applications were submitted to the government office for approval, while the highest number of applications, more than 3,500, was in 2019. (Citizens of the European Union, the European Economic Area and Switzerland can buy property in Hungary without a separate government office permit.)

The statement quotes Károly Benedikt, head of PR and analysis at Duna House, as saying that the rise in property prices has not slowed down in 2022, as is the case in most EU member states. According to Eurostat, Hungary is second only to Estonia in terms of house price growth (152%) in the first quarter of 2022. The price increase is expected to have an impact not only on Hungarian buyers but also on foreigners' propensity to invest, but for them the changes caused by the exchange rate movements could also present a positive picture, he added.

He said that a survey of sellers showed that foreigners' interest in the Lake Balaton real estate market has not declined, but demand has changed somewhat in 2022. German and Dutch families are no longer interested in waterfront properties, but mainly in authentic farmhouses in the inner-Somogy areas, looking for properties with large gardens in the hope of self-sustainable farming. The invasion in Ukraine could see Russian investors almost completely disappear from the Hungarian real estate market in 2022, while Ukrainian investors have so far been more active in the rental market.

According to official statistics, the majority of foreign property applications (76%) were for a house or apartment in the capital, with the largest number, 36% of transactions, from Chinese buyers. The most popular investment area for them was the capital, including districts 9, 10 and 13.

The share of Israeli investors declined to 5.2%, with more than half of their transactions closed in the capital's 7th district. Not far behind, at 5%, UK nationals were next in line, with District 6 and the eastern Hungarian city of Debrecen being the most attractive, while Pécs, a city in the south of the country, was the main destination for American buyers, who accounted for nearly 4% of transactions.