Ügyvédi iroda
Law office
Anwaltskanzlei
Cabinet d'avocat
Money flows into Budapest property funds
ingatlanhirek.hu: While three years ago domestic property funds were plagued by a trend of funds withdrawal, the situation has changed significantly since. Simultaneously with the upswing of the residential property market more and more investors turn to property funds which, as a result of the inflow of capital, have become one of the most active buyers of the property market.
Record-low deposit interest rates redirect investors to property funds offering relatively high returns. Property funds are, on the one hand, happy to have this influx of capital, but are, on the other hand, under a heavy pressure. They must buy more and more new properties to maintain their comparatively high level of returns. One of the consequences of this pressure is that domestic property funds have become one of the most active group of investors of commercial properties in Budapest (offices, shopping centres, logistics centres etc.).
Airbnb: Tax inspectors in tourist disguise?
hvg.hu: Short-term, mainly tourism-motivated apartment or room rental e.g. through Airbnb is gaining in popularity in Hungary, too. Earlier, the Hungarian Tax Authority had already reminded owners letting their property using the services of Airbnb that they need to register a tax number and must also issue an invoice. Now owners are warned that tax inspectors may even go one step further and rent rooms advertised online.
As part of their job employees of the tax authority perform test purchases and use various services, including accommodation, to find out whether providers comply with applicable tax regulations. Tax inspectors focus on spotting tax evaders and ensuring that neither tourists, nor legitimate companies or service providers, nor the state budget suffer any losses.
Construction industry on the decline
napi.hu: The sudden recoil of the construction industry was predictable and the rest of the year will see a marked decline with 2016 expected to take a very sluggish start. The construction industry is currently delivering on its large-scale contracts concluded back in 2013 and early 2014 and there have been no significant new jobs in sight since. Public procurement orders were 36 per cent down from the first half of 2014.
Retail and business contracts cannot make up for the missing government orders, so the output of the construction industry (including the sloping figures for the second half of the year) will be about the same, HUF 2100 billion, as it was in 2014. Now, in the second half of September there is still no sign of EU-financed high-profile tenders that could have a positive impact on the construction industry.
Properties are not the most popular form of investment – yet
According to napi.hu the combined amount of residential loans grew by almost 80 percent during the ten years between 2004 and 2014. At the same time, the total amount of state-funded loans shrunk by almost 50 per cent. The average amount of a loan taken out for a residential property (with all types of property considered) slightly exceeded HUF 3 million in 2004, then soared to HUF 6 million in a mere five years.
From 2009 onwards the economic crisis, stricter loan conditions and bad debts resulted in a quick decrease back to the 2004 level where the average has been floating ever since for the past three years. Despite the boom of the residential property market investment-motivated purchases are still comparatively rare and occur mainly in Budapest.