The capital of Hungary has been ranked among the top 10 fastest growing property markets in the world since 2017 by The Guardian. Today the city continues to be a rising real estate investment favorite, with the Telegraph recently crowning it Europe’s top place to invest in property.
Moreover, the last few months the Budapest real estate market reclaimed its title as the city with the fastest-rising house prices globally. Moreover, it’s the third time in the last year earning this title according to the Global Residential Cities Index reports by Knight Frank.
Hungary saw residential prices accelerate by 24% in the 3rd quarter of 2019 driven by low mortgage rates, strong employment and economic growth.
Yields of up to 8%, low to moderate transaction costs and landlord friendly laws are the key drivers behind the market’s rapid growth. But external factors, ranging from growing tourism to urban development have also accelerated Budapest’s popularity and profitability in the property market.
The ongoing renaissance of the city — large-scale renovations and new constructions alike — have set off a growing wave of tourism to the capital.
Budapest’s beauty, peace and historical legacy are met with an up and coming gastro and cultural scene. As the city grows in popularity, property investors are snapping up apartments for short and long-term rent alike.
At the turn of the century, Budapest was the second capital of the mighty Austro-Hungarian Empire.
Much of the urban environment that exists today was built in the 30 years around 1875, including the iconic Parliament (bid on by Freddie Mercury) and the Opera House. The result was a capital city on par with Paris or Vienna in grandeur and architectural sophistication.
Budapest’s real estate potential is still ripe for enterprising investors.
While the city sees the 5th fastest rising property prices in the world, historic properties cost a fraction of their London and New York counterparts. These relatively low entry points are matched with high returns of up to 8% in the most desired touristy neighborhoods.
And the market is still growing.
According to the Hungarian National Bank’s House Price Index, Budapest’s house prices surged by 16.9% in the 1st quarter of 2017. And this year marks the fifth year of a continuous house price boom.
Demand for both new and historic dwellings grew in parallel, reflected in the surge of housing credit, with credit for second-hand homes rising by 34.6% and for new homes by 63% YOY in 2016.
Investors across the spectrum have taken note — with second homes and short-term rental investments equally popular, while bigger fish aim even higher. Middle Eastern investors have purchased some of the city’s most iconic properties, including the Four Seasons Gresham Palace, the Buddha Bar Hotel and the Parizsi Udvar. They, and other hotels, are winning from this year’s 5.5% increase in touristic budgets spent on hotel accommodation.
Landlords with long-term rental properties in Budapest also enjoy an attractive 5-6% yield, while short-term rentals catering to the tourism boom promise even more, with an average 8% yield. Judging from the promising cultural and architectural renaissance taking place in the city, early investors can still win big.
Take a look at our individual guides to Budapest’s best areas here.
Today, frequent visitors and locals alike can witness the rapid rejuvenation of the city firsthand.
Centenarian palaces and facades are getting new coatings and much needed facelifts. Meanwhile, the first real attempts at serious contemporary architecture can be seen in the massive concrete voids of the Metro Line 4 and the cultural quarter, currently under construction.
Just as the sleeping architectural beauty of the city is coming to light, so too is the gastro scene taking consistent steps onto the global stage. Here as well, revival is the key, as traditional Hungarian comfort foods are reimagined as contemporary delicacies.
The four Michelin-star rated restaurants that the city boasts feature plenty of reinvented Hungarian dishes on their menu, often paired with wines from the country’s many regions. Eateries like Cafe Liberte, Borze, the Four Season’s Kollazs Brasserie and the historic Central Cafe marry classic Hungarian meals and pastries with impeccable Art Nouveau interiors for a terribly romantic effect.
The best way to experience the city’s revival is, of course, to experience it yourself. Don’t take our word for it — after all, Conde Nast, The New York Times, Lonely Planet and company have all provided their own unique guides to enjoying the city. The rapidly rising tourism statistics reaching 8.6% in 2017 attest that visitors are nodding in agreement.
Finally, what better authority to convince you what an irresistibly beautiful, burgeoning city that Budapest is than the creme-de-la-creme of Hollywood, our favorite stars from the silver screen?
You may or may not know this, but in an interesting confluence of factors (more on that later), Budapest has become a hot spot location for some of the world’s biggest productions — together with their all-star casts in tow.
So if you’re looking for some good qualitative evidence on the city, look no further than Dakota Fanning describing how she didn’t want to leave after The Aliens wrapped — shedding real tears when it came time to bid adieu.
Then there’s Jennifer Lawrence proclaiming her love for the city with the effusive proclamation, “I am Hungarian, and Budapest is my home.” This, followed up by similarly glowing accounts from the likes of Ryan Gosling, Charlize Theron, Harrison Ford, Rosamund Pike, and others.
These grand statements given during press interviews may be a bit dramatized, but actors like Gerard Depardieu, whose Budapest apartment has housed Brangelina during their stays here, have also walked the walk.
Why do Hollywood’s best actors and actresses love Budapest so?
Perhaps it was Tom Hanks that captured it most accurately, fresh from wrapping up Inferno, one of a few Budapest based movies he has starred in. In an interview with Aniko Navai he reminisced,
“We were driving back to our hotel after a shoot, and I saw girls biking on the street, walking hand-in-hand, singing and giggling. They were talking in the middle of the night out, on the streets. I had the feeling, that this is a totally safe city. You cannot experience this in American cities.”
Coming in at 15th in the 163 countries on the Global Peace Index, Tom Hanks is on to something. Visiting travellers and expats strolling peaceful boulevards or bustling squares at ease are sure to agree.
This remarkable barrage of celebrity endorsements is due to Hungary’s favorable movie industry climate. It’s incredible architectural backdrops believably stand-in for historic places long gone and also futuristic locales that don’t yet exist.
The Budapest opera house has doubled as the Argentine Presidential Palace in Evita. From wartime Paris, Prague and Rome in Spy and HHhH to Cold War Berlin in Spy Game and The Debt the city provides an array of architectural facades from Neoclassical to Art Nouveau, Brutalist to the occasional contemporary.
Even grand-scale sci-fi thrillers have found suitable inspiration in Budapest’s many interiors. The pivotal vintage casino setting in Bladerunner 2049 is none other than the city’s former stock exchange building on Freedom Square, a stone’s throw from the Parliament. Meanwhile the undulating Balna center on the Danube starred as the NASA HQ in The Martian.
There’s really no shortage of examples of Budapest’s monuments, buildings and residences in Hollywood movies. In this case, beauty on the outside reflects the same on the inside. There are any number of architecture tours and thematic walks that explore the jaw-dropping stairwells and foyers of downtown Budapest’s residential apartment buildings.
Whether you’re a star or a student, a property investor or a curious visitor, you’re sure to enjoy the rise of Budapest property in some way. The centrally located city is awash with architectural gems and high returns, coming at a steal compared to saturated cities like London and Berlin.
If you’re curious about available properties, and want first-hand insight about the Budapest real estate market, contact us here. We’d love to help with local, expert advice.