I read on Daily News Hungary that foreign interest in Hungary’s real estate market remains high, with nearly 8,000 transactions in 2022 and over 3,200 in H1 2023, according to the Hungarian Central Bank. The downtown districts of Pest, particularly the 5th to 9th districts, attract a foreign property ownership rate exceeding 20%. Notably, the Vietnamese, Chinese, and Russians were the top spenders in 2022, with an average property purchase range of HUF 60-70 million (EUR 157,000 – 183,000). Despite a dip in overall property transactions in 2023, foreign buyers increased their market share. Germans, Austrians, and Dutch nationals invest in West and South Transdanubian counties where property is more affordable. Germans, constituting the majority of buyers, often come to Hungary to retire, while East Asians arrive for employment or business ownership.
I think this is the main reason why the young Hungarian people cannot afford to buy properties. A lot of houses and flats are being sold for richer foreigners, which makes the prices rise. The problem is not that foreigners come here and buy properties. The EU is a free place, you can go and settle wherever you want. The problem is that Hungary still does not have euro. I think if we had euro, people could afford to buy more things here including properties. On the long run, it will be a problem. Where will people live? Mobile houses could be an alternative option in my opinion but this is not the solution. I am not saying that Hungary should forbid foreigners to buy properties here but the economy should be more balanced by starting to use the official currency of the EU.
So as you see, foreign investment in the Hungarian real estate market can have an impact on property prices, making it more challenging for young Hungarian people to afford housing. The adoption of the euro might bring some economic benefits, potentially increasing affordability and stability. I think the Hungarian government should address the housing needs of the population while maintaining an open and competitive market. A question for you: How do you think the Hungarian government could encourage affordable housing options for its citizens?
It’s indeed a complex situation with foreign investment affecting property prices in Hungary. The correlation between the absence of the euro and rising property costs is an interesting perspective. Balancing the interests of foreign investors and the housing needs of the local population is crucial. Encouraging affordable housing options could involve implementing targeted policies such as subsidies for first-time homebuyers, promoting sustainable housing developments, and possibly exploring partnerships with private sectors for affordable housing projects. Striking a balance between a competitive market and ensuring citizens have access to housing is undoubtedly a challenging task.