Foreigners’ Propensity to Buy Housing at a Five-Year High

Thanks to the opportunities offered by the northern and eastern border regions and Transdanubia – commuting and old-age resettlement – the interest of foreign home buyers is already higher than before the epidemic, writes Magyar Nemzet. In comparison, the capital city has taken a back seat, as only a fraction of the Chinese, Vietnamese, and Israeli buyers typically interested in the city have returned to the Hungarian market.

Although the shock of COVID has not yet passed without a trace, by 2022, foreigners largely returned to the Hungarian housing market, OTP Real Estate Point said in a statement. At the low point, in 2020, the first year of the epidemic, around 20-30% fewer homes were bought in Hungary than before.

Since then, the previous results have already been surpassed: while in a good sale period in the year of 2018, about 7,300 apartments were bought by foreigners, in 2022, this number was 8,000.

Four countries stand out in terms of turnover: Germany, Slovakia, China, and Romania. The interest of Chinese buyers in 2018 was at the same level as German buyers, but COVID brought a dramatic drop of around 50%.

Romanian buyers’ activity in 2018, was just below the levels already mentioned, but weakened the following year, stabilizing at a lower level of 25%.

Slovak buyers followed the opposite path: they increased the number of home purchases in Hungary by 45% in five years, making them now the second largest group of buyers behind Germans.

There is also a marked difference in where each group of buyers is looking for a new home in the country: nine out of ten Chinese, Vietnamese, and Israelis chose the capital. The Dutch and Germans, on the other hand, are real fans of the Hungarian countryside, with an average of two out of three of their group choosing the area around Lake Balaton. Among the reasons, apart from the nostalgia factor, there is public safety, affordable property prices, and of course, the high purchasing value of their euro-denominated pensions.

In addition, many foreigners prefer to live in quieter domestic settlements: the proportion of people buying in the capital is thus below 20% for Romanians, Slovaks, Austrians, Belgians, and the Swiss.

Italians, Russians, British, and the French, however, are more likely to buy a home in Budapest than in the countryside.

The statistics also record how much foreign buyers paid for their new homes. The biggest cost increases between 2018 and 2022, were felt by Austrians and Ukrainians. The average purchasing price of the former increased from HUF 14.7 million to 32.2 million (EUR 38,645 to 84,651) over this period, while the average spend of the latter increased from HUF 19.3 million to 42.3 million (EUR 5,0,738 to 111,197). The Swiss, who experienced a 107% rise in prices, were only slightly behind. By contrast, the French – who have meanwhile turned more strongly to the countryside – recorded an average price increase of just 19%.

The biggest news last year was a surge in the number of people coming from the UK, with nearly three times as many buying homes here as before the epidemic, when they were still EU members. This dynamic also meant that last year the UK was the largest home-occupying community in the capital, after the Chinese.

Via Magyar Nemzet, Featured image via Facebook/Liget Residence Fonyód