Russians and Chinese treat Hungary’s property market as an investment platform
In the Hungarian property market, Chinese citizens and the Russians were the most active buyers in 2023. Following the residency bond programme introduced years ago, the Hungarian government is launching a new initiative aimed at citizens from non-EU and non-EEA countries. This programme grants a ten-year residence permit in exchange for real estate purchases or donations to trustee foundations.
According to Telex, the new Hungarian “guest investor” programme will come into effect on 1 July, following the local and European parliamentary elections. Using insights from analysts at Ingatlan.com and Duna House, the news portal examined the current state of property purchases by non-EU foreigners, particularly focusing on the trends among Chinese and Russian citizens, who are the predominant buyers.
Chinese and Russian citizens most active buyers
Every spring, the Prime Minister’s Office releases data on the number of non-EU foreigners who applied for permission to buy property in Hungary. According to these reports, the number of applications submitted by foreigners increased by 18% in 2023 compared to 2022.
Last year, 2981 non-EU citizens applied, marking the highest number since the coronavirus pandemic, although it remains below pre-pandemic levels (nearly 3300 in 2018 and over 3500 in 2019).
Regarding actual transactions, Chinese and Russian citizens were the most active buyers in 2023, with Chinese nationals purchasing 647 properties and Russians 223.
Decline in Russian buyers since 2022
Recent data shows a narrowing gap between the two nationalities: Chinese buyers purchased 17% fewer properties in 2023 compared to 2022, while Russian purchases increased by 16%. For Russians, properties in the 6th district were most popular, whereas Chinese buyers favoured the 13th and 10th districts, with about a quarter of their purchases occurring there.
According to Károly Benedikt, PR and analysis director at Duna House, the strong interest from Russian buyers seen in the two to three years before the invasion of Ukraine has significantly decreased, now representing only about 10% of that previous interest. This decline is partly due to sanctions and restrictions on Russians: only those with Hungarian residency permits or those who purchase through companies can buy properties, and government approval is still required.
Financially, the process is also complicated. Many long-time Russian residents in Hungary had their bank accounts closed at the war’s onset. Selling existing properties is also difficult, and it is nearly impossible for individual Russians to acquire Hungarian real estate. Those who manage to buy properties and have sufficient capital typically invest in luxury properties, often as part of broader international investments.
Data from Duna House indicates that the proportion of Chinese buyers purchasing homes has also decreased, with most now buying for investment purposes. They tend to purchase properties with one or two bedrooms, typically valued around 80–100 million forints. Foreign buyers usually rely on intermediaries, with Duna House employing several Russian and Chinese-speaking experts, and essential documents available in Russian and Chinese, alongside English and German.
Thousands of Russians scoping the market
Statistics shared by Ingatlan.com support the notion that Russian buyers face significant challenges. The real estate agency reported that Russian interest in their listings has surged in comparison to Chinese interest over the past two years. In 2022, 504 Chinese and 2242 Russians inquired about properties, rising to 1342 Chinese and 3842 Russians in 2023. For January 2024, Russian inquiries (851) far outnumbered Chinese ones (66).
In 2022, after the Chinese and Russians, the most active buyers were Israelis (182) and Ukrainians (166), followed by British (132) and Turkish (75) nationals. In 2023, the Prime Minister’s Office included Vietnamese in the statistics, who previously were under the “other” category. Consequently, last year, 340 Vietnamese, 154 Ukrainians, 108 Israelis, and 108 Turkish citizens bought property in Hungary.
Read also:
- Housing market: Foreigners buy up the countryside, rents in Budapest cheapen
- Competitive: Number of Chinese-owned businesses in Hungary soaring
Featured image: depositphotos.com
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