Hungary is a market to watch- the forecast for sales volumes is expecting a rise by a quarter, on top of a 20% rise last year. Hungary is often overlooked, but indeed there is lots of optimism about its Real Estate market. Some key Real Estate professionals are positive that the market will improve further this year.
The best way to gauge the market according to industry professionals in the country is by looking at the findings of the H1 2015 RICS Hungary Sentiment Survey. According to their survey, investment appetite in Hungarian Real Estate is expected to improve further over the next six months. Looking at the residential market, since it has hit the bottom in 2013, sales have rapidly strengthened and the market is set for further growth. The number of residential sales is expected to reach 140,000-150,000 this year and it should get very near to pre-crisis times in 2016.
According to RICS Hungary, the market has two main drivers - investors can benefit from the 6-8% yields and buyers who have delayed their purchases during the crisis and are now coming back to the market.
Currently the percentage of overseas buyers in the Hungarian residential market is relatively low - at less than 5% on average - but in the capital, Budapest, especially in centre the demand for investment properties is higher than the supply, it has become a real hotspot in recent years. The influx of tourists, international students, large communities of expats and international companies basing their back offices in Hungary has certainly helped the surge in residential Real Estate investments.
The most popular districts are 5. and 6.- where the share of foreign buyers is around 10 per cent. Mostly the foreign buyers are EU citizens, Russians and some Chinese.
The capital accounts for almost 1 in 10 searches (8.6 per cent) for property in Hungary between June 2014 and May 2015 and include four of the top 10 searched-for locations.
Budapest also dominates among more serious property hunters, with the city making up one in four Hungarian real estate enquiries.
Hungary's spa resorts continue to have high international interest: searches for Heviz multiplied 16 times in the past two years, turning Zala, Keszthely into the second most popular region in the country. There is also ongoing demand for residential properties in Somogy and Jasz-Nagykun-Szolnok.
Optimism is also strong among residential buyers as mortgage rates are going down in Hungary, the economy is growing, unemployment rates are lower. The base rate in Hungary is at an all-time low at 1.5 per cent, making the 6-8 per cent yields achievable on the residential market very attractive.
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