Foreign buyers, and house prices
Foreigners bought 7,300 properties in Hungary last year, accounting for 12% of all sales in Budapest. In parallel to that, house prices are increasing by more than 15% per year.
Foreign buyers in Hungary
Market size: 7,300 transactions per year
- 7,300 transactions per year
- 12% of buyers in Budapest were foreigners
- 15% of buyers in Western Transdanubia, and 12% in Southern Transdanubia
According to the latest Central Statistics Office (KSH) report, a total of 7,300 foreigners bought properties in 2018. Notably, this figure is very similar to 2017 (7,371 transactions).
Where do they buy?
- 41,6 % bought in Budapest, the remaining 58,4% opted for Western and Southern Transdanubia, where foreigners accounted for 15 and 12 percent of all transactions
Most of them bought in the countryside (Transdanubia) and in Budapest.
Indeed, foreign buyers represented only 2.3% of the Hungarian housing market nationally, but they accounted for 12% in Budapest and 26% in districts of Pest.
What’s the average transaction price?
- € 122,000 in Budapest
- € 41,000 in the countryside
The average spending of foreign home buyers in Budapest exceeded 122,000 euros (40 million HUF). However, the French and the Chinese spent more, with an average of 132,000 – 138,000 euros (43-45 million HUF).
While foreigners spent an average of € 41,207 on Hungarian homes outside Budapest, this price exceeded € 122,105 in the capital
Top nationalities of foreign buyers
Foreign buyers came from:
- Germany
- France
- China
- Vietnam
- Israel
- Romania
However a graph published on Portfolio.hu (see below) reveals that some nationalities bought many cheap properties, while others bought fewer properties yet a higher price.
Notes to understand the graph:
Orange columns = number of transactions per nationality; Red points = sales volume per nationality, in millions of Forint (HUF) ; Nemetorszag = Germany ; Kina = China ; Egyeb EU-n kivuli = Other non-EU residents ; Francia orszag = France
Top 3, by number of transactions
When looking only at the number of transactions, the top 3 foreign buyers in Hungary was:
- Germany (1,100 homes acquired)
- China (1,100 homes acquired)
- Romania (1,000 homes acquired)
However, Germans and Romanians did not buy mostly in Budapest, but in the countryside where property prices are significantly lower. So, if we look at the market size, the top 3 differs largely.
Top 3, by sales volume
As more than 80% of Vietnamese, French and Chinese buyers became home owners in Budapest, their budget was on average three times higher (€ 122,005 € vs € 41,207). As a result, even if the French buyers acquired fewer homes than the Germans, it represented more money in sales volumes:
- Vietnam
- France
- China
Chinese citizens purchased more than 1,000 properties in Budapest.
Over 80% of the Vietnamese, Chinese, Israeli and French who bought in Hungary became owners in Budapest.
Property prices increase 15% per year
Hungarian home prices increased by 60% since 2015. As always when property prices increase, foreigners are blamed. Yet, according to GlobalPropertyGuide, government incentives have largely contributed to the increase.
Indeed, looking at the annual change in house prices below (GlobalPropertyGuide), we see that the market completely turned in 2015. Falling house prices have turned into fast-growing prices, above 15% per annum.
Sources: