Is buying a property in District XII a good investment?

Last updated on December 29, 2023

Yes, the analysis of Tehran's property market is included in our pack

If you've experienced the suburban comfort and green spaces in District XII, you may have thought about investing in property in this Budapest district.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Iran, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in District XII?

District XII in Budapest, often referred to as the Buda Hills, has garnered significant attention from property buyers for several reasons.

This district stands out in the Budapest real estate market due to its unique blend of natural beauty and urban convenience. Imagine a place where the tranquility of lush greenery meets the accessibility of city amenities – that's District XII for you.

Firstly, let's talk about the natural allure of the area. Nestled in the Buda Hills, this district offers an escape from the hustle and bustle of city life, with panoramic views of Budapest.

The abundance of parks and green spaces makes it a breath of fresh air, quite literally, for those who crave a serene living environment within a city. This connection to nature is a rarity in urban settings and is a key factor in its popularity.

Comparatively, when you look at other areas of Budapest, like the bustling District V in the city center or the more industrial District IX, District XII offers a more relaxed and upscale atmosphere.

It's like having an oasis in the midst of urbanity. This district became particularly popular in the early 2000s as Budapest's real estate market began to flourish. People started to value the balance between urban living and natural surroundings, and District XII offered just that.

However, the question is whether this popularity will sustain. Based on the continuous demand for properties in this area, it seems likely. The district's charm isn't something that diminishes over time.

Its appeal lies in its timeless qualities – the green spaces, the views, and the peaceful environment. As long as these remain, so will its attractiveness to buyers.

Now, about the people it attracts – District XII is particularly appealing to families and professionals. Families are drawn to the area for its safety, quiet streets, and good schools, making it an ideal place to raise children.

Professionals, on the other hand, appreciate the district for its proximity to the city center while offering a retreat from the hectic work life. It's like having the best of both worlds.

But, like any place, District XII has its drawbacks. One significant issue is the cost. The desirability of the area comes with a higher price tag, making it less accessible to a broader range of buyers.

Additionally, while the district is well-connected, it's not as centrally located as other parts of Budapest, which can be a downside for those who prefer living in the heart of the city.

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Why is District XII a nice place to live?

District XII, often referred to as the "Buda Hills," is renowned for offering a lifestyle that balances urban convenience with a touch of nature's tranquility.

This district, perched on the hills of Buda, provides a serene escape from the city's hustle while maintaining a vibrant cultural and community atmosphere.

The lifestyle in District XII is characterized by a blend of relaxed living and cultural richness. The area is dotted with historical landmarks, cozy cafes, and local art galleries, contributing to a culturally immersive environment. It's a place where the past and present coexist harmoniously, creating a unique and enriching living experience.

For expatriates, District XII is particularly appealing. The district hosts a welcoming expat community, making it easier for newcomers to integrate and find a sense of belonging.

This international community adds to the area's diverse cultural tapestry, often organizing events and gatherings that provide opportunities for socializing and cultural exchange.

When it comes to the cost of living, it's important to note that District XII is one of the more upscale areas of Budapest. Property prices and the cost of amenities tend to be higher here compared to other districts. The quality of life and the serene environment often justify the extra expense for many residents.

Safety is a key feature of District XII. It's known for being one of the safer areas in Budapest, with low crime rates and a strong sense of community. This aspect makes it particularly attractive for families and those seeking a peaceful living environment.

The district is well-equipped with various amenities and facilities. Notable schools in the area include the Britannica International School and the American International School of Budapest, both offering high-quality international education.

For healthcare, residents have access to facilities like the Buda Health Center, providing comprehensive medical services. Shopping and leisure needs are catered to by malls like MOM Park, which houses a variety of shops, restaurants, and entertainment options.

Infrastructure quality in District XII is commendable. The roads are well-maintained, utilities are reliable, and internet connectivity is generally excellent, catering to the needs of modern living. This solid infrastructure supports the comfortable and convenient lifestyle that residents enjoy.

In terms of accessibility, District XII is well-connected to the rest of Budapest. While it enjoys a more secluded location, major transport hubs like the Budapest Ferenc Liszt International Airport are accessible via main roads and public transport.

Speaking of public transport, the district is served by a network of buses and trams, making it easy to commute to and from other parts of the city.

How much does it cost to buy real estate in District XII?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Iran.

Buying a property in District XII, often regarded as one of the city's most prestigious neighborhoods, offers a range of options from apartments and houses to luxury villas.

The diversity in property types caters to various lifestyle preferences and budgets, though the general trend leans towards upscale living.

In District XII, there's a noticeable demand for both apartments and detached houses. Apartments, particularly in well-maintained older buildings or modern complexes, attract those seeking urban living with a touch of historical charm.

Detached houses and luxury villas, on the other hand, are sought after by those desiring more space and privacy, often with stunning views of the city or the Buda hills.

The area has a mix of resale properties and new developments. While the charm of historic buildings remains a strong draw, new developments offer modern amenities and energy-efficient living, increasingly popular among buyers.

Regarding prices, District XII is on the higher end of the Budapest property market. The price per square meter varies significantly based on the type of property and its specific location within the district.

Generally, you can expect prices to range from approximately €3,000 to €5,000 per square meter. For luxury properties or those in exceptionally desirable locations, prices can be significantly higher.

Over recent years, property values in District XII have seen a steady increase. This trend is attributed to the district's continuous popularity, its reputation as a prestigious residential area, and the general growth of the Budapest property market. The demand for quality living spaces in serene, green areas like District XII contributes to this upward trend in property values.

Looking forward, there are several factors to consider when predicting the real estate market in District XII. One key aspect is the potential impact of upcoming developments and city planning changes.

New infrastructure projects or enhancements in public transportation, for instance, could further increase the attractiveness of the area. Any new luxury residential developments could also push property values higher.

When it comes to potential increases in value, several factors play a role. The district's limited space for new developments, coupled with its high desirability, suggests that property values may continue to rise.

The ongoing demand for quality housing in prestigious areas, along with improvements in infrastructure and amenities, also indicates a potential increase in property values.

Where is the best area to buy a property in District XII?

When considering the best area to buy a property in District XII, it's important to understand that this district is quite diverse, offering different atmospheres, property types, and prices in its various parts.

One of the most sought-after areas in District XII is the region around Svábhegy and Pasarét. These areas are known for their lush greenery and offer a peaceful, almost countryside-like environment within the city. Svábhegy, in particular, is famous for its luxurious villas and spectacular views of Budapest.

The properties here tend to be on the higher end of the price spectrum, but for those seeking exclusivity and tranquility, it's an excellent choice.

Another notable area is around Normafa, known for its natural beauty and outdoor recreational opportunities. Properties here range from charming older homes to modern villas, catering to a variety of tastes. Normafa is ideal for those who love nature and prefer a quieter, more residential setting.

On the other hand, the area closer to the city, such as those near Moszkva tér (now Széll Kálmán tér), tends to be more urban. Here, you will find a mix of older apartment buildings and newer developments.

The proximity to the city center makes it a convenient location, especially for those who work in downtown Budapest or enjoy the city's vibrant lifestyle. Prices in this area can be more moderate compared to the more suburban parts of the district.

In terms of up-and-coming areas within District XII, the regions around Farkasrét and Mártonhegy are gaining popularity. These areas have been witnessing new developments, attracting a mix of families and professionals.

The properties here offer a balance between urban convenience and the tranquility of a more removed location. These areas might not have the same prestige as Svábhegy or Normafa, but they offer more affordable options while still providing the benefits of District XII.

However, it's important to be cautious about areas that are too close to the Buda Hills' forested regions. While the proximity to nature might be appealing, these areas can sometimes be less accessible, especially during harsh weather conditions in winter. Properties in these areas might require more maintenance due to their exposure to natural elements.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Iran.

Area	Characteristics	Property Types	Price Range
Svábhegy	Luxurious, peaceful, countryside-like environment, great views	Luxury villas	High-end
Normafa	Natural beauty, outdoor activities, quieter residential setting	Older homes, modern villas	Moderate to high
Moszkva tér (Széll Kálmán tér)	Urban, close to city center, convenient	Older apartments, newer developments	Moderate
Farkasrét and Mártonhegy	Emerging popularity, balance of urban and tranquility	Varied, catering to families and professionals	More affordable
Near Buda Hills' forested regions	Close to nature, can be less accessible, requires more maintenance	Varied	Varies, potential for higher maintenance costs

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Is there a strong rental demand in District XII?

District XII is indeed experiencing a strong rental demand, and understanding the dynamics of this demand is key for anyone considering property investment in the area.

The rental market in this district is somewhat unique, influenced by its location, property types, and demographic appeal.

The demand in District XII leans more towards long-term rentals. This is largely due to the district's appeal to families and professionals who are often seeking stability and a higher quality of living.

The area's tranquil environment, combined with its proximity to the city center, makes it an ideal location for those who want the best of both urban and suburban living.

The target demographic for rentals in District XII mainly consists of middle to upper-income families, expatriates, and well-established professionals. These potential tenants are often looking for properties that provide comfort, space, and a touch of luxury.

Apartments in modern complexes and detached houses are particularly in demand. These properties offer the added advantages of security, privacy, and sometimes exclusive amenities like gardens or terraces, which are highly valued by this demographic.

Specific areas within District XII, such as Svábhegy and Normafa, are especially popular for long-term rentals. These areas are known for their upscale homes and beautiful natural surroundings, attracting tenants who are willing to pay a premium for these features.

In terms of amenities, features that can help reduce vacancy and attract tenants include modern fittings, parking facilities, good public transport connections, proximity to international schools, and access to green spaces.

Properties that offer these amenities are generally more attractive to potential renters, thereby commanding higher rents and reducing the likelihood of long-term vacancies.

Regarding potential returns on investment, District XII offers promising prospects. While the initial investment might be higher due to the district's upscale nature, the consistent demand and higher rental prices can lead to attractive yields.

You could expect a return on investment in the range of 4-6%, depending on the property type and exact location. It's worth noting that this is a general estimate and actual returns can vary.

Currently, the types of properties that are seeing increasing demand, and thus potentially offering better yields, are well-maintained older apartments and modern family homes. These properties cater to the district's primary rental market – families and professionals seeking quality and comfort.

As the district continues to develop and attract a stable, affluent tenant base, these property types are likely to remain in high demand, making them a potentially wise investment choice.

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Is it easy to buy a property as foreigner in District XII?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Iran.

Buying a property as a foreigner in District XII of Budapest, like in any other part of Hungary, is relatively straightforward, but there are certain nuances and considerations that foreign buyers should be aware of.

Firstly, regarding regulations and restrictions, foreign buyers generally do not face significant legal hurdles in purchasing property in Hungary.

However, non-EU citizens need to obtain a permit for the purchase of residential property. This process involves a property purchase permit application submitted to the competent Government Office, which is usually a formality but adds an extra step to the buying process.

The purchasing process in District XII typically follows the standard Hungarian real estate transaction procedures. It starts with property selection, followed by a reservation agreement and the payment of a reservation fee.

Then, a purchase agreement is drafted, usually by a lawyer, which outlines the terms of the sale. Payment is typically made through a lawyer's escrow account, and the transaction is completed upon the registration of the property in the Hungarian Land Registry.

When it comes to risks associated with property investment in District XII, the primary concerns are market fluctuations and property valuation. Like any real estate market, there's the potential for economic factors to impact property values.

Additionally, ensuring that the property is free from legal encumbrances and has all the necessary permits can be challenging, particularly for foreign buyers unfamiliar with the local regulations.

A classic pitfall in Hungary, and specifically in an area like District XII, is underestimating renovation costs. Some properties, especially older ones, may require significant upgrades to meet modern standards. These costs can add up quickly and should be factored into the overall investment.

Working with a local real estate agent and a lawyer is highly advisable. A local agent can provide valuable insights into the District XII market, help navigate cultural and language barriers, and identify properties that meet your specific needs.

A lawyer is essential for ensuring that all legal aspects of the transaction are handled correctly, including contract preparation, due diligence, and compliance with Hungarian property laws.

Common exit strategies for property investors in District XII include selling the property at a profit after a period of capital appreciation, or renting out the property for a steady income stream. The choice of strategy should align with the investor's overall goals and the market conditions at the time of exit.