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Hungarian Property Investment Examples
Typical average purchase price of a Hungarian property = £25,000
Typical price change per annum of a Hungarian property around Lake Balaton = +8%
Therefore from 2010 to 2012 an investment of £25,000 could grow to £29,160
Typical price change from pre Euro Zone entry to post Euro Zone entry = 20% +
Possible entry year of Hungary into Euro Zone = 2012(to be confirmed)
Therefore entry into the Euro Zone could give a further 20% + growth to £34,992 or more.
This sort of capital growth represents an increase of £9,992 over a 2 year period, on an investment of £25,000 that's a 39.968% growth, or averaged out it's 19.984% per annum.
Given that when/if Hungary joins the Euro Zone mortgages become easier to acheive and different mortgage packages will become available, then the price of Hungarian property is far more likely to see a large increase in values than the examples above. This is why so many European investors are buying up Hungarian property and simply 'landbanking' knowing that within a few years the land or property will have increased markedly in value. With council tax at such low rates in the good investment areas buying a Hungarian property and just 'sitting on it' represents a high investment potential with low risk and low overheads.
If the property is rentable then an income could be acheived which further increases the return on investment(ROI).
If a property was bought for £25,000 as in the example above and it was rented out during the summer season for half of the time available say for 10 weeks at a rental of £200 per week then that would give an income of £2,000 per annum or an average of £166 per month for that year. With an extra £2,000 per annum that increases the ROI on your Hungarian property to £13,992 over a 2 year period, on an investment of £25,000, that's a 55.968% ROI, or averaged out it's 27.984% per annum. At the time of writing(May 2009) it's very difficult to find anywhere that that kind of ROI potential is available.
When looking at investing in property abroad have a look at the properties that are marketed in this website and you will notice that the areas that we market have never been involved in a 'boom and bust' scenario. On the contrary the areas in Europe that we market have always shown reasonable growth at a normal rate and continue to do the same. This is in contrast to most other areas that people have invested in where they have seen massive drops in the values of their properties. Our Hungarian properties still represent excellent value for money with good potential growth and return on investment.
Some Investment News
July 21, 2009, 9:14 CET
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