25 reasons why to invest in Budapest Real estate
At Gateway Properties we have identified 25 key reasons why purchasing property in Budapest represents a fantastic opportunity to invest in the capital city of an EU country with years of further stable growth ahead of it. Indeed, for the reasons below, we feel strongly that now is the best time to get into a market that is only going one way, and fast.
1. Budapest is without doubt one of the world’s most stunning cities. Investment and restoration in the city is continuous; its historical treasures are constantly being refurbished and renewed, whilst new world-class buildings are springing up each year. 2. Whilst Budapest is known as the ‘Paris of the East’, comparable high-end properties in Budapest are actually a fifth or less of the cost of those in Paris, or indeed in London, and a quarter of those in Dublin.
3. In Sept 2007, the EU approved a total of €25 billion in EU funds to be invested in Hungary over the next 6 years to accelerate economic growth in the country. The effect of this huge influx of funding will be felt most keenly in Budapest.
4. EU experience shows that each €1 of public funding is matched by at least €1 of private sector investment. The effect of the EU’s massive investment in Hungary could thus see an additional
€25 billion of private money invested in the country.
5. A very tax efficient investment. From 1st January 2008, property investors will pay no capital gains tax in Hungary on property they have owned for 5 years.
6. Strong economic growth over the last decade, underpinned by an open market economy dominated by massive multinational investment. Budapest is the engine of economic growth in Hungary, contributing over 40% of annual GDP.
7. Hungary is converging towards the EU average in terms of living standards and wealth. Living standards in Budapest, as the centre of the country by every possible measure, are converging to the EU average more rapidly and more visibly than in the rest of Hungary.
8. EU funding will release stored up growth in Hungary’s economy. Economists expect the stimulating effect of funding to be similar to the boom experienced in Ireland in the late 1990s.
9. Hungary has been a European Union member state since 2004. Property in its capital city represents a safe, low-risk and profitable investment.
10. As Hungary goes through this ‘Catch-up’ phase, the property market in Budapest will experience rapid growth from today’s relatively low base. Growth in the Budapest property market will therefore be more sustained and much quicker than in more established economies such as the UK, Germany and France.
11. Hungary is pouring millions into investments in infrastructure development, an essential driver of future economic growth. In the last five years the length of Hungary’s motorway network has doubled. Last year, 177 km of new motorways were added to the network; a further 100km will be opened in 2007 and an additional 11 new stretches of motorway will be built by 2010.
12. In Budapest, a fourth metro line is currently being constructed. This massive investment will link Southern Buda to North East Pest, and property prices in the areas surrounding the new metro stations will experience a boom.
13. In addition to new motorways and massive investment in public transport, Hungary is also constructing two new bridges over the Danube, which will relieve traffic congestion in the inner city and make the capital even easier to access.
14. The Sept 2007 Global Political Risk index, published by the Eurasia research group, places Hungary as the most stable emerging market country in the world.
15. Private investment in Budapest is also intensifying. A current building boom of class ‘A’ office buildings is taking place in the city, many being built by global financial titans, such as AIG and ING. Many other international companies are also expanding their existing operations in Budapest, making the city their regional HQ and thus driving the growth in high quality office construction.
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16. Hungary already has the largest shopping mall in Central and Eastern Europe, but that will be dwarfed by a new shopping and leisure development in Budapest’s 8th district, a project recently purchased by British venture capital firm Active Asset Investment Management for 380 million.
17. Budapest is the economic powerhouse of the country, and is also the centre of R&D for many multinational companies such as Nokia and SAP Global, companies that recognise Hungary’s unique geographical location, and its unrivalled pool of intellectual capital.
18. As so many multinational companies have set up base in Budapest, the city is home to an estimated 15-20,000 expatriate workers from all over the globe making the city truly international. As many stay for the long-term, well-heeled expats are also helping to push up property prices in Budapest’s premier districts.
19. There is a relative shortage of well-renovated re-sale apartments in Budapest period buildings. Investing in such property in an attractive inner city location means letting the property for a substantial rent is straightforward and easy.
20. Budapest is a growing centre for tourism. With the rise of the low-cost airline, Budapest is flooded with tourists year round. As well as driving the city’s economic growth through spending, this is also creating a lucrative short-term letting market for Budapest property owners.
21. Budapest is easily accessible: a two-hour direct flight from the UK, and 2.5 hours by car from Vienna and Bratislava. Croatia and the Adriatic coast is less than a six-hour drive, quality skiing in Slovakia and Austria is in reach within 3-4 hours. The largest in lake Central Europe, Lake Balaton, a popular summer holiday centre and one of Hungary’s famous wine regions, is only 90 minutes away Budapest.
22. Hungary aims to adopt the Euro within the next five years. Euro adoption will mean lower interest rates, cheaper mortgages, more inward EU investment in the city and thus property prices will experience a boom as the country switches to the single currency.
23. Budapest is a centre of culture and the arts. World standard ballet, opera, theatre and classical music are performed on a regular basis, and ticket prices are a fraction of those of other European cities.
24. Budapest property ranges from classic turn of the century elegant period apartments to exclusive new off-plan developments in central locations and exciting new regeneration zones in key investment districts.
25. Budapest is simply a joy of a city to live and work in. Public transport is cheap and efficient, living costs are low compared to Western Europe, the climate is favourable, crime is low, and overall quality of life is much higher than in many European capital cities.
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