Increased Interest from Foreigners Boosts Hungarian Housing Market in Budapest

Published: December 05 2023

The Hungarian housing market in Budapest has seen an increase in interest from foreigners, with a significant upturn in activity since the low point of 2020. This has led to higher sales volumes and price increases in certain buyer groups. In this article, we will delve into the details of the increased interest from foreigners and highlight the key countries driving this trend.

Foreign buyers have shown renewed interest in the Hungarian housing market, with sales volumes surpassing pre-pandemic levels. While the capital city of Budapest remains a popular choice, there has also been a notable increase in buyers looking to purchase properties in the countryside, particularly around Lake Balaton. This can be attributed to factors such as public safety, affordable property prices, and the high purchasing power of euro-denominated pensions.

Several countries stand out in terms of turnover in the Hungarian housing market. Germany, Slovakia, China, and Romania have been key drivers of the increased interest from foreign buyers. Chinese buyers, in particular, experienced a significant drop in activity during the COVID-19 pandemic but have since returned to the market. Slovak buyers have consistently increased their home purchases in Hungary over the past five years, becoming the second-largest group of buyers after Germans.

The preferred location for a new home varies among different groups of foreign buyers. Nine out of ten Chinese, Vietnamese, and Israelis choose Budapest as their preferred location. On the other hand, Dutch and German buyers show a preference for the Hungarian countryside, specifically the area around Lake Balaton. The choice of location is influenced by factors such as nostalgia, public safety, affordable property prices, and the purchasing power of their pensions.

The average purchasing prices for foreign buyers have experienced significant changes between 2018 and 2022. Austrian and Ukrainian buyers saw the largest cost increases during this period, followed closely by the Swiss. On the other hand, French buyers, who have shifted their focus more towards the countryside, recorded a relatively smaller price increase.

One notable trend in the Hungarian housing market is the surge in buyers from the UK. Since the UK's departure from the EU, there has been a nearly threefold increase in UK buyers purchasing homes in Hungary. This has positioned the UK as the second-largest home-occupying community in Budapest, after Chinese buyers.

In conclusion, the Hungarian housing market in Budapest has experienced increased interest from foreign buyers, with sales volumes surpassing pre-pandemic levels. The key countries driving this trend include Germany, Slovakia, China, and Romania. The choice of location for foreign buyers varies, with some preferring Budapest and others opting for the Hungarian countryside. Changes in purchasing prices have been observed among different buyer groups, with notable price increases in certain countries. The surge in UK buyers has been a significant development, solidifying their presence in the Hungarian housing market.

What impact did COVID have on the Hungarian housing market? COVID caused a temporary decline in home purchases in Hungary, with around 20-30% fewer homes bought in 2020 compared to previous years. However, by 2022, foreigners had largely returned to the Hungarian housing market.

Which countries stand out in terms of foreign home buyers in Hungary? Germany, Slovakia, China, and Romania are the countries that stand out in terms of turnover in the Hungarian housing market. German and Chinese buyers were particularly active, while Slovak buyers increased the number of home purchases in Hungary by 45% in five years.

Where do most Chinese, Vietnamese, and Israeli buyers prefer to buy homes in Hungary? Nine out of ten Chinese, Vietnamese, and Israeli buyers prefer to buy homes in Budapest, the capital city of Hungary.

Which group of foreign buyers prefer the Hungarian countryside? Dutch and German buyers are fans of the Hungarian countryside, particularly the area around Lake Balaton. They are attracted to the area because of public safety, affordable property prices, and the high purchasing value of their euro-denominated pensions.

Is Budapest the preferred location for all foreign buyers? No, not all foreign buyers prefer to buy homes in Budapest. For example, the proportion of people buying in the capital is below 20% for Romanians, Slovaks, Austrians, Belgians, and the Swiss. Italians, Russians, British, and the French are more likely to buy a home in Budapest than in the countryside.

Which groups of foreign buyers experienced the biggest cost increases for homes in Hungary? Austrians, Ukrainians, and the Swiss experienced the biggest cost increases for homes in Hungary between 2018 and 2022. The average purchasing price for Austrians increased from HUF 14.7 million to 32.2 million (EUR 38,645 to 84,651), while the average spend for Ukrainians increased from HUF 19.3 million to 42.3 million (EUR 50,738 to 111,197). The Swiss had a 107% rise in prices.

Did the number of home buyers from the UK increase or decrease in Hungary? The number of home buyers from the UK increased last year, with nearly three times as many buying homes in Hungary compared to before the epidemic. This surge in UK buyers also made the UK the largest home-occupying community in Budapest, after the Chinese.