Not only is the capital of Hungary listed among the top 10 fastest-growing property markets in the world since 2017, but recently the Budapest real estate market claimed its title as the city with the third fastest-rising property prices in the EU with a 22.8% annual growth rate in 2022 according to Eurostat.
The capital of Hungary has been ranked among the world's top 10 fastest-growing property markets since 2017 by The Guardian. Today the city continues to be a rising real estate investment favourite, with Statista recently placing it 3rd among Europe's price appreciation powerhouses.
Moreover, as the Covid pandemic effect subsided, in the last few months, the Budapest real estate market reclaimed its title as the city with one of the fastest-rising house prices globally.
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.
A city on the rise
The ongoing renaissance of the city — large-scale renovations and new constructions alike — has 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 snatching 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.
A favourite destination for property investors…
Budapest’s real estate potential is still ripe for enterprising investors.
While the city is among the 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 neighbourhoods.
And the market is still growing.
According to the Hungarian Central Statistical Office’s House Price Index, Hungary’s aggregated housing index surged from the 1st quarter of 2015 to the 2nd quarter of 2022 by 252.8%, which means that this year marks the seventh year of a continuous house price boom.
According to Eurostat, demand for both new and historical dwellings grew parallelly in the last year, with a 22.8% YOY growth rate in 2022.
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 the continued 5.5% increase in touristic budgets spent on hotel accommodation this year.
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 7% yield. Judging from the promising cultural and architectural renaissance taking place in the city, early investors can still win big.
…and also for visitors and tourists
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 actual attempts at serious contemporary architecture can be seen in the massive concrete voids of the Metro Line 4.
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.
Beloved by Hollywood’s stars
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 favourite 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 was 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. Still, 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?
One of the world’s most peaceful cities
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 13th 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.
Hollywood’s favourite film set
This remarkable barrage of celebrity endorsements is due to Hungary’s favourable movie industry climate. Its 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 centre 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 is 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.
Contact us here if you’re curious about available properties and want first-hand insight into the Budapest real estate market. We’d love to help with local, expert advice.