Hungary has become an attractive destination for real estate investment in Europe thanks to its strategic location, rich cultural heritage and growing economy. As of 2024, several factors highlight the benefits of investing in the Hungarian real estate market. This article presents the latest trends and statistics that show why Hungary is an ideal place for real estate investment.

Growing economic stability

Hungary’s economy has proven to be resilient and growing despite global uncertainties. According to the Hungarian Central Statistical Office (KSH), Hungary’s GDP is expected to grow by around 4.0% in 2024, driven by strong development in sectors such as manufacturing, technology and tourism. This economic stability creates fertile ground for real estate investments, as it generally leads to increased demand for residential and commercial properties.

Affordable real estate prices

At the beginning of 2024, real estate prices in Hungary are still relatively low compared to Western European capitals. According to real estate market reports, the average price per square meter in Budapest is €1,920. These costs are significantly lower than in cities such as Paris or London, where the average price is €10,500 and €14,600 respectively. This affordability allows both domestic and international investors to enter the market with a manageable capital requirement.

High rental yields

Budapest has become increasingly attractive for investors in rental properties due to the high rental yield potential. Recent data suggests that rental yields for residential properties in Budapest can range between 6% and 8%, depending on the location and type of property. A property purchased for €200,000, for example, could generate annual rental income of between €12,000 and €16,000, making it an attractive option for those seeking passive income

Growing demand for short-term rentals

Tourism in Hungary continues to flourish even after the pandemic. According to the Hungarian Tourism Authority, Hungary welcomed over 15 million international tourists in 2023. This increase has created a booming market for short-term rentals, especially in Budapest, where the rental market can generate significant profits through platforms such as Airbnb. In many central districts, the average occupancy rate is 70- 80%, making short-term rentals a lucrative investment opportunity.

Favorable investment conditions

Hungary has a favorable economic and tax environment for real estate investors. Currently, the corporate tax rate in Hungary is 9%, the lowest in the European Union. This favorable tax structure combined with a personal income tax rate of 15% on rental income makes Hungary an attractive option for both domestic and foreign investors. There are also various tax incentives and deductions that can increase the overall profitability of real estate investments.

Investment incentives for foreign buyers

The Hungarian government actively encourages foreign real estate investment. The Golden Visa Program allows non-EU citizens to obtain a residence permit through real estate investments of €500,000 or more. This policy not only facilitates property ownership, but also opens up access to the Schengen area, making it an attractive option for global investors looking to be mobile within Europe.

Strong legal framework and transparency

Hungary’s membership of the European Union guarantees investors a stable legal framework that protects property rights and investments. The country has committed to making property laws transparent to ensure the security of investments. Investors can rest assured that their rights are protected by a solid legal system.

Conclusion

Real estate investment in Hungary offers numerous benefits, from a stable and growing economy to competitive real estate prices and high rental yields. With the added incentives for foreign investors and a favorable tax environment, Hungary is an attractive option for anyone looking to invest in European real estate. As the market continues to develop, investors can expect significant growth and return opportunities for their investments in this dynamic country.

For those looking to expand their investment portfolio, Hungary offers a promising landscape that is not only affordable but also rich in potential.