Location: Where to Live with a Family in Budapest
Expatriate Housing in Budapest
Keep in mind when searching for a place to live in Budapest:
- Neighborhood – While some transferees prefer the inner city (which typically offers apartments), most tend to look for homes in the hilly Buda side and nearby suburbs of Budapest.
- Overall transportation needs – heavy traffic during rush hour might make areas near public transportation much more appealing.
- Commute to work – In the mornings (7:00 – 9:00 a.m.) and after office hours (4 – 6 p.m.), traffic can be really heavy between your workplace and your home. A 10 minute drive on the weekend might translate to a 30 minute or one hour drive during the week. The worst case is crossing the river Danube from the Buda side to the Pest side at around 8 a.m. Elisabeth bridge (Erzsébet híd) tends to be the fastest bridge to cross.
Expatriate housing
Expatriate families tend to seek housing on the Buda or western side of the city. They prefer living in family homes located in green, quiet and clean residential neighborhoods.
The most popular neighborhoods in Budapest for expat families are districts 2, 11 and 12 on the green and hilly Buda side, close to international schools.
For those who want to live near work and do not mind busy-city noise, recommended areas on the Pest side are the centrally located districts 5, 6, 7, and the southern edge of 13. Apartments in these districts are usually smaller; surroundings more urban, thus more polluted and noisy.
Less expensive, more comfortable
Expatriate families are just recently discovering the south-western residential areas in the 11 and 22 – include the southern part of Sasad, Madárhegy and Budafok within Budapest city limits, as well as suburbs such as Budaörs, Törökbálint and Diósd. You get ‘more house’ for your money here, and since the area developed later, rush hour traffic will be gentler on you than in the northern Buda districts 2 and 3.
There are two shopping malls with cinemas, restaurants and nice shops: MOM Park in district 11, and Campona in district 22. There are also numerous other large shopping centers in close proximity: Auchan, IKEA, Tesco, Cora and many more near highways M0, M1 and M7; but even Mammut mall is easily approachable.
Getting around: You can reach the nearest Metro line at Deli pu by car or by public from anywhere in the area. Drop your car at Deli and hop on the subway (Metro) to go to the city center. New Metro 4 is going to come even closer, but I don’t dare to predict when that will really happen. Driving is easier in this recently developed south-western area, serviced well with highways and motor roads. The airport and major highways are also easier to reach from here than from the northern and central districts.
Recommended School in the area: ICSB. Driving through the back roads of the Buda hills, you can also reach the other international schools without being caught up by heavy rush hour traffic.
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Back to Buying in Budapest »
Location: Where to Buy Investment Residential Property in Budapest
The city of Budapest is divided by the Danube river into two cities: Buda and Pest. There are also 23 administrative districts in Budapest. The number of the district largely sets the property price.
The flat and busy Pest side is the location for the city’s financial, administrative, commercial and retail centers. The primary areas of interest for the residential property investor are the central 5th and 6th districts.
On the hilly and residential Buda side of the city, the prestigious residential areas of the Buda hills are becoming a favorite amongst longer-term investors, since expatriate families tend to rent long term in these pleasant, green neighborhoods, near international schools.
Where to buy a home to live in Budapest? »
Location is the key to any property investment decision!
The latest trend of Budapest investors hoping for higher capital appreciation:
Good quality residential property in the most wanted neighborhoods of the green, residential Buda hills, from 2 bedroom flats to luxury villas. These are the locations where the more fortunate Hungarians prefer to reside, as well as the expatriate community, with an even growing number of international schools.
Among expatriate families who tend to rent long term in Budapest, districts 12 and 2 are the most popular and also most expensive areas to live. They are scenic, and parts of them look like you are in the country. But there are other upcoming green and quiet, residential neighborhoods for less, where more and more international families decide to settle. Search in parts of district 11 (Sasad), and 22 (Budafok), and even a number of Buda suburbs, including Budaörs, Diósd, Törökbálint, Biatorbágy, Nagykovácsi, Budakeszi and Solymár. Check expatriate housing for ideas.
Buda side districts with investment potential
District XI (11) – The largest Buda district includes the more central Kelenföld, which houses two large universities, the Technical University and the ELTE University of Sciences with lots of their dorms; as well as famous Gellert-hegy and scenic Sasad-Sashegy (Eagle Hill).
A new subway-line called Metro 4 is under construction, which will have all of its 5 Buda-side stations in district 11, making the busy inner (Kelenföld) part of the district an even better investment spot and a more convenient place to live. The latest large shopping mall, Allee just opened in the heart of district 11, at one of the future stations of Metro 4.
The Sashegy and Sasad areas are quite nice family neighborhoods, though they are more convenient with a car, similarly to most nice places of Buda. I live in this area, and my teen-age offsprings used to get around quite well on public transportation (numerous bus-
lines and tram 59). International schools are also close proximity.
District XII (12) – Buda hillside: the most prestigious and exclusive residential districts of Budapest, the home of the President and Prime Minister among other political luminaries. Nice, green, upper-class and expensive, being the most desirable location
for the better-to-do Hungarians as well as expatriate families and international schools.
District XXII (22) Budafok – Up-and-coming district with a lot of green. If you want to live in the green own a car, this is probably the most comfortable and definitely the most inexpensive Buda district within Budapest city limits. A great advantage for English speaking families with kids: the nearness of ICSB (International Christian School of Budapest), and the large and fun Campona mall.
Pest-side districts with investment potential:
If you are not very familiar with the city, stick to central districts (particularly 5 and 6) and as close to main thoroughfares as possible, e.g. Andrássy út or the Körút. I wouldn’t really recommend new apartments for the most part. They tend to be overpriced, and rather low in quality.
For the purchase-refurbish-sell deal, the quickly developing districts
7, 9 and 13 are also recommended.
The 5th, 6th, 7th, 9th districts (in Pest), and 11th (in Buda) are where the universities are located with many foreign students who are looking for apartments to rent, especially along the metro lines. It is not enough, however, to go by districts, as the prestige of smaller neighborhoods greatly varies.
The most desirable part of the city for singles (students and businessmen) is the central district 5, followed by the rapidly developing western areas of District 6, which has undergone something of a renaissance in recent years, especially the streets near Andrássy út. Other areas with good investment potential include the central end of District 7 as well as parts of the rejuvenated District 9, particularly around Ráday Street, and district 13, between the Danube river and West-End City Center.
District V (5) (and parts of VI) are the most likely areas for higher capital appreciation in the smaller investment category, especially near the Basilica in District 5 – Hercegprímás utca, Sas utca, Oktober 6 utca as well as all streets near the Parliament.
This is the most desirable city-center location and is quiet and pretty as well as close to businesses as well as everything else. With some luck you can still get great renovated one bed apartments on the best streets in District 5 for just over € 100,000
District VI (6) boasts the famous Andrássy Boulevard, Heroes’ Square, the trendy Oktogon and Liszt Ferenc Squares with their cafes and restaurants, a favorite area among foreign tenants. The smaller, quieter streets near Andrassy (such as Szív, Szinyei Merse, Munkácsy) are pleasant places to live. An achievable rent of 300-350 for a furnished 1 bed in these and similar streets is a realistic expectation. I would definitely furnish as you will find it hard to rent otherwise. 90% of people who rent in the city center are non-Hungarians, with no furniture of their own.
District VII (7), the traditional Jewish Quarter behind the Great Synagogue, has seen tremendous investment recently, with buildings renovated rapidly and parks cleaned up beautifully.
Dohány utca – Akácfa utca location is good, close to everything, but by no means considered a prestigious area. Rental prospects will probably be quite good. Price seems okay to highish. Renovated 80 m² second hand apartments would more than likely rent for € 450 / month. Students won’t be able to afford the rents if they are to be around the 6% mark. (The average salary in Hungary is around € 500-600 / month). The surrounding area is okay. It’s not that close really to Blaha Lujza tér, which is not a nice place to be yet. However, the city is trying to re-develop this square and also, a new luxury hotel (New York Palota) opened recently right beside it.
The Madách tér area near Deák tér is an extremely central location with lots of businesses close, and should be rentable. It became a lot prettier lately than it was before.
District VIII (8) – I wouldn’t really recommend investing in most of 8 although there are a few fairly good parts. But the worst parts of central Pest are also located here and sold to unaware foreigners (areas in or around Alföldi Street, Kun Street beside Erkel Színház Theatre, Fiumei út, Rákóczi tér, Orczi tér).
It would be more difficult to rent out apartments here than in the other districts of central Pest. Despite being quite close to the center, district 8 is not a desirable area. People believe crime is higher here and it was traditionally the center of prostitution in the city.
You don’t actually experience that much of it any longer, but if you were to ask any Hungarian where the worst part of the center was, 90% would agree with me. Many of the new buildings in this area also seem to be aimed at foreigners, who may not be aware of local opinions.
Closer to Kálvin tér is a lot better, such as part of Baross utca, but even still, there is nothing so amazing about that area either.
District IX (9) – Trendy bars and cafés are springing up on Ráday utca and in the section bounded by the Nagykörút, attracting university students and young professionals.
Refurbished older parts close to the Körút, such as Ráday utca, are good, but new builds further out tend to be ugly and overpriced. The government spent a lot to improve the area but be careful to spend your money on a new apartment here. You will very probably have problems renting it out, and when it comes time to sell, you may also run into difficulty. For the price of a poor quality new apartment here, you can get a second hand apartment in district 6, beside the Opera and just off Andrássy út, right in the center of town.
If you have made up your mind to buy a new apartment anyway, the part of district 9 close to the Danube is likely to be a fine investment. The new National Theatre is located close by as well as more centrally located Ráday utca, which is one of the best streets over here for restaurants, cafes and bars with ambiance and culture. Some of the popular Summer bars are also within walking distance.
Tenants will probably prefer apartments with overlooking inner garden. The design looks fairly good compared to other new builds in the city.
District XIII (13) – A well to do location with some history and many antique shops, directly serviced by a metro line. Its best location is Szent István Park and Újpesti Rakpart between Szent István Park and Margit híd (Margarete bridge).
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Back to Buying in Budapest »
Rental Yields in Budapest
Good news! Residential rental yields in Budapest move sharply up!
Gross rental yields in Buda (fall, 2009)
| BUDA - Apartments | € COST TO BUY | € MONTHLY RENT | YIELD | € / m² COST TO BUY | € / m² MONTHLY RENT |
|---|---|---|---|---|---|
50 m² | 78,700 | 427 | 6.50% | 1,574 | 8.53 |
85 m² | 143,990 | 981 | 8.17% | 1,694 | 11.54 |
120 m² | 257,160 | 1,532 | 7.15% | 2,143 | 12.77 |
200 m² | 461,600 | 2,618 | 6.81% | 2,308 | 13.09 |
Source: Global Property Guide
Gross rental yields in Pest (fall, 2009)
| PEST - Apartments | € COST TO BUY | € MONTHLY RENT | YIELD | € / m² COST TO BUY | € / m² MONTHLY RENT |
|---|---|---|---|---|---|
50 m² | 82,950 | 479 | 6.93% | 1,659 | 9.58 |
85 m² | 130,985 | 826 | 7.57% | 1,541 | 9.72 |
120 m² | 201,960 | 1,366 | 8.11% | 1,683 | 11.38 |
Source: Global Property Guide
Gross rental yields in Pest for the high-end apartments now average 7.54%, and their yields have increased by almost 2% from the previous year.
Gross rental yields for a similar category in Buda average a lower 7.16%, but again have increased by 1.59% on GPG’s 2008 estimates.
This is very positive news, suggesting that value is returning to at least some real estate markets, after the recent turmoil.
Quality is a must!
Rental yields for more typical, good but not especially high-end central Pest apartments average 5.6%, while Buda yields tail slightly behind at 5.57%. The Buda side of Budapest is becoming a favorite of longer-term investors.
Residential rental return of 6% and above is still considered good. A guaranteed rental return simply does not exist!
Good location and quality unproblematic renovated apartment is a must! Low quality, superficial refurbishment is no longer good enough!
The supply of quality units is extremely limited. New build apartments are in large supply (but often poor quality at questionable locations), and owners are typically having to reduce rents.
Apartments tenants look for
Tenants are likely to be either wealthy Hungarians or foreign professionals / students, of which there are approximately 150,000 in Budapest. Tenants demand a luxury specification, with a high standard of renovation and furnishing, including flat TVs, leather sofas and thoughtful interior design.
There is a lack of well-designed, well-furnished apartments in the city and premium-quality apartments tend to attract premium rents. Tenants in Budapest have grown to have high standards, and throwing in a few mismatched pieces of furniture, even from Ikea, is no longer good enough to attract a tenant. More and more investors of more keenly-priced classic properties are renovating their apartments to a standard that exceeds that of standard new-builds with designer tiling, suspended ceilings and Philippe Stark bathroom fittings, hoping to attract the more discerning tenant.
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Back to Buying in Budapest »
Expenses When Purchasing
Typical costs when buying residential property in Hungary include:
1) Solicitor’s fee: 1,5 %; paid by the buyer upon signing the purchase contract. A lawyer’s participation is required in Hungary. All lawyers have the right to countersign your Purchase contract, but it is very advisable to use a real estate specialist. They are the ones who can make sure you are not becoming the victim of a
property scam, and can save you a significant amount of time at taking care of paperwork. Email or call me and I can introduce you to reliable, experienced and English-speaking specialists – even if you are not using my other services. Which you should :)
2) Buyer agent’s commission: 2 %, paid upon signing the purchase contract. Using the services of a buyer’s agent is optional. Check my “Fees & Discounts” section.
Prices quoted above do not include 25% VAT which you must also pay with a company invoice (your company can then reimburse VAT).
3) Property Acquisition Duty (also called “Stamp Duty”): 4%.
Good news! As of 2010, the general duty rate on the transfer of property will be reduced to 4% from 10%. If residential property is acquired, the duty rate will be 2% on up to HUF 4 million of the value of the property. The duty rate on amounts above HUF 4 million will be 4%.
Within the frameworks of its official procedure, the Land Registry Office (Földhivatal) notifies the relevant Duty Office (Illetékhivatal) to establish the duty of the transfer of the ownership right to be paid by the new owner.
The Duty Office will establish the amount and orders the payment of the property aquisition duty (illeték) to be paid within fifteen days following the receipt of the order. You can expect this to happen a few months (2 – 6 months lately) after your ownership is
registered by the Land Registry Office. The amount of the duty is based on the purchase price of the property.
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Back to Buying in Budapest »
Buying for the Right Price
Make sure your purchase does not end up becoming a costly adventure!
Capital Appreciation in Budapest
The Budapest real estate market is at a stagnating-low point currently, which means that:
- this is a good time to purchase now, and you should be able to find good deals in the long run;
- this is not a good time to sell, so if you own property here, try to hang on to it. If you must sell anyway, make sure that your property is presented as nicely as possible; make it stand out with a few designer touches.
- Budapest is a long term investment location; you should be able to keep your property for at least 6 years to sell with a good profit.
Prices of good properties have remained the same as n 2003 or risen slightly since then. Lower quality condos and houses have definitely fallen in price and those are almost impossible to sell. The market continues to be oversupplied with the wrong type of property and there is a low number of transactions.
Know How Much the Property is Worth
Before making a buying decision, you will need to know how much the property is worth. When you are the buyer, you will have to check comparable market prices in the neighborhood to make sure you are not paying too much.
I strongly advise you to enlist the services of an experienced Buyer Agent to make sure you buy the right property for the right price.
For a rough idea, here are some average Budapest purchase price statistics:
Average Asking Prices in Buda districts of Budapest for brick buildings (fall, 2009)
| District | I | II | III | XI | XII | XXII |
|---|---|---|---|---|---|---|
| Ft / m² | 469 000 | 500 000 | 330 000 | 357 000 | 431 000 | 311 000 |
Average Asking Prices in central Pest districts of Budapest for brick buildings (fall, 2009)
| District | V | VI | VII | VIII | IX | XIII |
|---|---|---|---|---|---|---|
| Ft / m² | 494 000 | 353 000 | 282 000 | 252 000 | 305 000 | 334 000 |
Average Residential Asking Prices in Buda suburbs (fall, 2009)
| Settlement | Biatorbágy | Budakeszi | Budaörs | Diósd | Érd | Törökbálint |
|---|---|---|---|---|---|---|
| Ft / m² | 283 700 | 300 400 | 333 500 | 281 900 | 220 500 | 320 200 |
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Krisztina Palhegyi a certfied Realtor, has been a Home Search Specialist (Buyer Agent) in Budapest for over 13 years. If you are looking to rent or buy a home in the Budapest or the Buda suburbs, then you are in the right place.>