In the one or two years after the crisis, there was hardly any need to think about where to buy a home, as they only yielded a nice return to investors because of the significant rise in prices from year to year. Even though prices are still going up, nowadays, especially in the longer term, it is much more important to see what returns can be achieved by renting a home in addition to rising prices.
Changes in yield levels can be traced well on the chart
Where yields were 5 years ago and now. Rents have increased by an average of 50 percent since 2014 (the lowest, below 30 percent in District II and Győr, and the highest, above 70 percent in District VII and VIII, and Pécs and Szeged), but the price of real estate is much higher this increased by 115 per cent (least, 75 per cent in Pécs, best by 173 per cent in District VII), which is why yields fell every 5 years.
VI. In District 5, for example, yields fell from 11 percent to 6 percent in five years, but from our point of view, the point is not the rate of decline, but what we can expect today from renting out our property. In this respect, three rural towns, Pécs, Szeged and Kecskemét were the best performers, followed by two districts in Budapest (III and VIII).
Even though many people still think that it is only worthwhile to buy in the city center for investment purposes, it seems that nowadays only Airbnb-type home rentals can achieve above-average returns.
Budapest or the countryside?
There is no question that in those county towns where the demand for rental apartments is strong due to the universities – Pécs, Szeged – it is especially worth buying a well-located, well-spaced apartment for rent. However, as a Budapest resident, running a home in these two cities may result in extra costs – travel or the cost of a local contractor – which worsens your return on investment. Therefore, living in the capital, you may want to shop in one of the capital’s districts. According to the aforementioned analysis, this is currently the subject of Annex III. and VIII. district, but no matter where and what apartment we buy.
Used or new home?
Whether or not you buy a used or new home depends largely on the amount of property you can invest. However, if one can afford both, it must also be considered whether in the market for new or used homes, a higher price increase is expected beyond the yields available for rent.
However, before buying a property, whether new or second-hand, it is important to be thoroughly informed, in the case of a used condominium and its legal environment, and in the case of a new one, the developer’s trustworthiness.