In recent years, Budapest has become a real magnet for investors looking to invest in new buildings. This city, with its rich history and unique architecture, attracts both local and foreign buyers. But what exactly makes the real estate market in Budapest so attractive? Let's find out.

Here are a few key points that we will discuss in this article:

• Current economic and market factors affecting investment.
• Advantages of investing in new buildings and their prospects.
• An overview of key areas for investment.
• Government support programs that can help investors.
• Risks and challenges faced by buyers.

In this context, it is important to note that as of 2023-2024, Budapest's new building market is showing a steady growth. According to local analysts, prices for new buildings in Budapest increased by 10% last year, and future projections promise even greater growth. Interesting, isn't it? Let's delve into the details and find out why now is the right time to think about investing in new buildings in Budapest.

Economic and market factors

When it comes to investing in new construction in Budapest, it is important to consider several key economic factors shaping the real estate market:

1. Sustainable economic growth

Hungary's economy has shown stable growth in recent years. According to the World Bank, the country's GDP increased by 4.9% in 2022. This creates favorable conditions for the development of the housing market, as the growing GDP contributes to the increase in household incomes and, consequently, the demand for housing.

2. Population increase

Every year more and more people choose to live in Budapest, which leads to an increasing need for housing. This is especially noticeable in the city center and in areas with good transport accessibility, where the demand for apartments remains high.

3. Impact of the COVID-19 pandemic

The pandemic certainly had an impact on the real estate market, but Budapest quickly adapted to the new conditions. Many experts note that after the initial downturn, the market has started to recover. In 2024, there has been an increase in the number of planned construction projects, indicating that confidence has been restored among both developers and buyers.

4. Mortgage affordability

Another important factor is the availability of mortgage loans. In recent years, Hungarian banks have offered many attractive conditions for obtaining loans, which has greatly simplified the process of buying a home. Low interest rates make investments in new buildings even more attractive.

5. Risk accounting

However, it is important to remember that interest rates can change in the face of global economic instability. This factor should be taken into account when planning investments to avoid unexpected financial difficulties in the future.

Thus, investments in new buildings in Budapest look very promising due to sustained economic growth, increasing population and availability of mortgage lending.

Why invest in new buildings in Budapest?

Now let's take a closer look at why exactly new buildings in Budapest are becoming such an attractive investment. First of all, prices for new buildings in Budapest compared to other European capitals, such as Prague or Vienna, remain relatively low. For example, the average price per square meter in Budapest is around 2,500 euros, while in Vienna this figure exceeds 4,000 euros. This creates excellent opportunities for investors looking for a good return on investment.

Secondly, it is worth paying attention to infrastructure development. In recent years, new roads, bridges and metro stations have been actively built in Budapest. This not only improves the quality of life of city dwellers, but also significantly increases the value of real estate in nearby neighborhoods. For example, the M3 metro line extension project, due for completion in 2024, promises to raise the value of new buildings on the outskirts of the city.

Also, you can't forget about Budapest's attractiveness as a tourist destination. The city receives millions of tourists every year, which creates demand for rental housing. Investors who choose new buildings in popular tourist areas can count on stable rental income.

In conclusion, Budapest offers unique investment opportunities in new buildings due to the combination of a stable economy, reasonable prices and active infrastructure development. If you're still considering whether to invest in a real estate in Budapestthen it might be worth looking at these factors.

Important areas for investment in new buildings

Important areas for investment in new buildings

When it comes to choosing a neighborhood to buy a new building in Budapest, investors are faced with many interesting options. Below are the key neighborhoods to consider investing in, with information on the prices and features of each.

Each of these neighborhoods has its own unique features and benefits, so it's important to thoroughly research the market and choose the best fit for your investment goals.

State support programs

Government support programs in Hungary provide significant benefits for investors, both local and foreign. Below are the main types of support, their pros and cons, and examples.

1. Housing Assistance Program

Description: The program is designed for young families and first-time buyers. It provides subsidies that significantly reduce the financial burden on buyers.

Positive:

• Reduced initial housing costs.
• Increasing accessibility of new buildings for a wide range of buyers.
• Supporting young families and stimulating population growth.

Minuses:

• Income and age restrictions may exclude some potential buyers.
• The need to provide multiple documents and comply with the terms of the program.

Example: A young family planning to buy their first apartment can receive a subsidy of up to 30% of the housing cost, which significantly reduces the financial burden.

JASMINE

from €135,000

Angyalföld, Budapest, Hungary

Metrodom Green

from €143,100

Ferencvaros, Budapest, Hungary

Metrodom River

from €168,732

Uybuda, Budapest, Hungary

Corvin Next

from €179,724

Józsefváros, Budapest, Hungary

Woodland

from €217,000

Ferencvaros, Budapest, Hungary

Marina City

from €235,766

Ferencvaros, Budapest, Hungary

2. Tax deductions for mortgage loans

Description: There are tax deductions for mortgage interest, which can reduce the total amount paid.

Positive:

• Reducing the tax burden on homeowners.
• Incentivizing real estate purchases using mortgages.

Minuses:

• Tax credits may not be available to all categories of citizens.
• The need for bookkeeping and record keeping for deductions.

Example: An investor who takes out a mortgage loan of €100,000 with an interest rate of 3% can reduce his tax liability by the amount of interest paid during the year.

3. income tax benefits for foreign investors

Description: Programs aimed at attracting foreign investment offer income tax credits and other financial preferences for investors who purchase new buildings in certain areas.

Positive:

• Attractive conditions for foreign investors.
• Increasing the flow of foreign investment into the country's economy.

Minuses:

• It may take longer to complete the paperwork.
• The need to understand local legislation and the tax system.

Example: A foreign investor who buys a new building in a certain neighborhood in Budapest can receive an income tax benefit of 10% instead of the standard 19%.

It is recommended that you check to see if the state programs are up to date at the time of viewing, changes may be made.

Recommendations

It is important to research the conditions and requirements for all available subsidies and benefits. Consulting with local real estate experts and lawyers can help you avoid making mistakes and missing out on profitable opportunities. Proper use of government support programs can significantly increase your returns and reduce the risks of investing in Budapest new buildings.

Future forecasts

What does the future hold? The real estate market in Budapest is expected to continue to grow and the demand for new buildings will remain high. According to analysts' forecasts, prices for new buildings may increase by another 15-20% in the coming years, which makes the current time particularly suitable for investment.

Given the active development of infrastructure and population growth, Budapest will remain attractive to investors. It is important to note that the growth of real estate prices in the capital can significantly outpace the growth rates in other regions of Hungary, which creates additional investment opportunities.

In addition, interest in Budapest as a tourist destination is expected to continue to grow, which will also contribute to an increase in demand for rental housing. Investors who choose new buildings in popular neighborhoods can expect stable rental income, which makes the investment even more profitable.

Conclusion

Investing in new buildings in Budapest opens up wide horizons and offers you unique opportunities to increase your capital. With a steadily growing economy, reasonable prices and active government support, now is the best time to consider investing in this dynamic market.

Budapest not only attracts local buyers, but is also becoming increasingly interesting for foreign investors due to its cultural appeal and tourism potential. If you are ready to take a step towards a successful real estate investment, we are ready to support you every step of the way.

Don't miss the chance to take advantage of all the advantages that Budapest's new building market offers. Contact us to learn more about the available options and get professional advice. We will be happy to help you make the right choice!