A Guide to Investment Property Hungary
With its unique history and breathtaking rolling plains, Hungary is a land of mystery that once stood apart from most of Europe. With the political landscape now changed and European Union entry granted, Hungary has opened its doors for investors, holidaymakers and expats to explore its distinct geography and unique sites.
The stable government, strong international relations and growing tourism industry in Hungary combine to make this an interesting location for investors. At Nubricks.com we would factor the following 10 reasons as those driving investor confidence for investment property in Hungary:-
1) Hungary’s Stable Government Inspires Property Investor Confidence
Hungary’s parliamentary democracy has done a fantastic job of brining order and reform to this former communist country. In fact, Hungary is credited with helping bring the fall of communism in 1989 by opening its borders to East Germans. The Hungarian democracy has been in place since 1990 and has held sway over a time of peace and growth. Whilst the road to overall economic and political stability is still being traversed, Hungary is considered a friend and ally to most of Europe. It has made incredible strides in a short amount of time. According to the UK Foreign & Commonwealth Office, Hungary has bolstered its economy from a 28% inflation rate to less than 6% since 1995. It has also enjoyed a steady rise in exports and other improvements during its transition to a free-market economy. The overall political landscape in Hungary serves to inspire investor confidence.
2) European Union Status Helps Investors Feel Connected to their Purchases, and Opens the Door for Holidaymakers
Hungary’s accession into the EU in 2004 has paved the way for a major bolstering of investor confidence in the country. Whilst Hungary still is working to bring itself up to western standards in some regards, it has made incredible strides. The country’s overall relationship with Europe and its peaceable status make it very attractive to investors who desire investment opportunities in countries that are backed by the European establishment.
3) Hungary’s Close Ties to the UK Inspire British Investors with Confidence in the Country and its Real Estate Economy
Investors who take comfort in countries which share good relations with the UK will find it is hard to top Hungary. The Foreign & Commonwealth office describes its bilateral relations with Hungary as “excellent.” The two countries are working closely together to strengthen Hungary’s transition into the EU. The UK-Hungary Action Plan, for example, was forged to help Hungary obtain EU entry, but now is continuing to bolster the country’s reform, regulation and growth programmes. The close ties between Hungary, the UK and other European nations deliver a sense of security to investment here.
4) Economic Stability Bodes Well For Property Investors in Hungary
Hungary might not have the fastest growing economy in all of Europe, but the country is holding its own. The GDP is estimated at US 110.9 billion and is experiencing a growth of about 4.15% - which is well above the western European norm. The country is working off a budget deficit, but its industrial base is fairly solid. Industry here ranges from metallurgy and construction materials to automobile manufacturing and chemicals. Investors who desire growing economies find Hungary’s overall stability rather attractive.
5) Growing Tourism Boosts Property Investor Confidence, and Provides a Market for Financial Returns
With Hungary’s entry into the EU and its continued success as a post-communist democracy, tourism in Hungary is on the rise. Interest in this country’s history, geography and tourist attractions is starting to take hold in a very big way. Although its tourism trade is modest in comparison to other nations around the world, Hungary is anticipated to continue growing this industry. The World Travel & Tourism Council anticipates Hungarian tourism will grow at a rate of about 4.6% per annum through 2017. The continued growth in the tourism industry is good news for investors that are interested in buy-to-let and resale potential. As more holidaymakers and expats make their way to Hungary, the potential returns will become more favourable. Although growth in property value has slowed a bit, it has been reported as high as 16% per annum in some areas of the nation recently. Rental yields in Budapest are a modest but realistic and sustainable 6% in many cases.
6) Hungary’s Geography and Climate Appeal to Many Holidaymakers, Which is Great for Real Estate Investors
Hungary’s 93,000 square kilometres offer a diversity of landscape and a beautiful continental climate in most areas. Most of the country’s landscape is covered in beautiful flatlands and rolling plains. It does offer some low mountains and is graced by the Danube, Tisza and Drava rivers. The Lake Balaton area is a favourite among holidaymakers, but Lake Heviz and its spa are also major attractions. Heviz is the largest thermal lake in the world. The southernmost part of the country near Pecs enjoys a milder climate than the rest of Hungary, but does still see winter snowfall. Although landlocked by other European nations, Hungary’s geographic is considered stunning by many. This is especially so when the unique sights are also taken into account. This is good news for investors who want to see tourism potential in the regions in which they invest.
7) Interesting Tourist Destinations Increase Interest in Hungary and Boost Confidence in Purchases and Investment Strategies
Hungary offers visitors many interesting sights to take in. From its natural splendour to its unique architectural features, the country is a favourite among holidaymakers for many good reasons. In Budapest for example, holidaymakers revel in seeing the treasures of the Hungarian National Museum and Vajdahunyad Castle . The towns that dot the Danube also draw in their share of holidaymakers. The Lake Balaton area itself is one of the country’s most noted tourist destinations. Beyond its beautiful waters, this area offers quaint villages, the historic Benedictine Abbey, the Episcopal Palace and Gizella Chapel. With historic draws and beautiful landscapes, Hungary offers a fair amount of things for holidaymakers to see and do. This is very good news for investors looking at buy-to-let potential.
8) Very Favourable Exchange Rate Makes Hungary Quite Attractive to Investors, Expats and Holidaymakers
The exchange rate between the British pound and the Hungarian forint is incredibly favourable for investors. With one pound equalling more than 360 forints, British buyers find their money takes them very far in Hungary. The exchange rate coupled with the relatively low cost of living makes Hungary an attractive destination for investors, holidaymakers and expats alike. It is also popular among those who are seeking holiday homes. All of these things inspire investor confidence in the potential long-term returns Hungary has to offer.
9) Low Buy-In Prices Offer Lots of Opportunity for Investors in Property in Hungary
Purchasing property in Hungary offers some of Europe’s most reasonable prices. Off-plan apartments are attainable for less than GBP 30,000 in major tourist destinations. Although the country is experiencing a bit of a downturn in prices right now, properties are not expected to remain low for terribly long. This is great news for investors interested in buy-to-let potential and those looking at hold-and-sell strategies. With tourism on the rise, the price downturn is expected rebound.
10) Easy Accessibility Makes Hungarian Property Investments Very Attractive for Foreign Investors
Travel to Hungary from other European countries is extremely easy. Many low-cost air carriers offer very reasonable rates for round-trips to Hungary’s biggest cities. This is incredibly attractive for investors, since it makes inspecting property simple. It also is fantastic for those looking at buy-to-let strategies, since holidaymakers also enjoy the same easy access. Visas are not required for citizens of most major European countries, the US and Canada.
From Budapest to Lake Balaton, Hungary offers much for expats, investors and holidaymakers. This former communist country has experienced its share of ups and downs. As the political and economic landscape changes, investors are discovering that opportunity can be found within its borders.
