Overview of Real Estate Markets in 6 European Countries

Europe's real estate market continues to be a strong and stable investment option, attracting investors from all over the world. With a market value of nine trillion U.S. dollars in 2022, the European Union (EU) real estate market offers diverse investment opportunities and a range of benefits. These include economic stability, a thriving tourism and hospitality industry, rich historical and cultural appeal, urbanization, renowned education and research hubs, political stability, well-developed infrastructure and connectivity, diversification and safe haven, and legal and regulatory harmonization.

Investors can choose from a wide variety of countries and unique real estate markets within the EU to find the most suitable market and investment strategy that matches their preferences and risk appetite. Many EU countries boast stable economies and political systems, making them an excellent choice for real estate investments. The EU represents a significant portion of the global economy, and its economic stability inspires investor confidence. Furthermore, Europe's rich history, diverse cultures, and architectural heritage make it an appealing location for real estate investment.

One of the key advantages of investing in EU real estate is the well-established legal systems, advanced infrastructure, and harmonized regulations and standards across member states. This provides a solid foundation for lucrative investments. If you're considering investing in European real estate, it's crucial to thoroughly research your options and develop a strategy to achieve your investment goals.

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Let's take a closer look at real estate markets in six European countries to help you make an informed decision.

Buying Real Estate in Hungary

Buying residential property in Hungary is relatively straightforward for natural persons. After finding a property and agreeing on a price with the seller, you'll need to hire a lawyer to create the purchase agreement and file it with the land registry. Depending on your nationality, you may need a license from the local government office, which can be obtained with the help of your lawyer. After finalizing the purchase agreement, you'll need to pay property tax, which varies based on the purchase price and other factors.

The Hungarian housing market witnessed a slow turning point in Q4 2022. While prices remained higher compared to the previous year, housing market sales fell by a fifth in Q4 2022, except in the capital city of Budapest. Energy efficiency aspects have become more important for buyers, with the quality of second-hand detached houses for sale being lower than that of new homes. Despite market fluctuations, positive trends have been observed in the second-hand real estate market in Hungary, with prices steadily increasing at a slower pace throughout the year.

Buying Real Estate in Estonia

Acquiring real estate in Estonia is allowed for foreign individuals and companies with permission from local authorities. However, when purchasing agricultural or woodland properties over 10 hectares, it's essential to obtain permission from the county governor to avoid legal issues. Foreign individuals cannot acquire land in certain smaller islands or territories near the Russian border. The property purchase process typically involves drawing up a "pre-purchase protocol" to finalize the sale-purchase agreement, requiring a 10% deposit and notarization. The transfer of property ownership should be completed at the notary's office, and stamp duty must be paid at a bank before submitting the registration application.

The Estonian housing market is currently experiencing a significant slowdown due to various factors, including a struggling domestic economy, high inflation, rising interest rates, and the ongoing invasion of Russia of Ukraine. Demand for housing has sharply declined, resulting in a decrease in the number and area of purchase-sale contracts. House prices are also decelerating, making it challenging for buyers and sellers.

Buying Real Estate in Poland

The legal requirements for buying property in Poland as a foreigner vary depending on your nationality. EU citizens from countries like Iceland, Liechtenstein, Norway, and Switzerland have no limitations and enjoy the same opportunities as Polish citizens. Non-EU foreigners may require a permit from the Ministry of Internal Affairs and should apply well in advance to avoid delays. Certain types of properties, such as apartments or garages, do not require a permit. Individuals with a permanent residence permit or EU resident permit may also be exempt from permit requirements. Poland's housing market growth has slowed down due to various factors, including the ongoing pandemic and the Russian invasion of Ukraine. Despite an overall rise in prices, the market is constantly changing and adapting.

Buying Real Estate in Czechia

Foreigners, including EU citizens, can easily buy property in Czechia with a permanent residence permit or granted asylum. Non-EU and non-US citizens may need a visa and must remain in the Czech Republic for seven years or marry a Czech citizen to buy property. Alternatively, they can purchase property through a company. It's essential to ensure title security and property quality with a report and consult with an independent lawyer when signing a reservation contract. The Czech economy saw a mild contraction in 2022, with a decline in private consumption and adjustments in the commercial property sector. Consider these factors when investing in the property market.

Buying Real Estate in Serbia

Foreign individuals conducting business in Serbia can purchase real estate necessary for their business, provided there is reciprocity. Those not conducting business can only buy flats, houses, or apartments if reciprocity is met. Foreign companies can purchase real estate for business purposes if there is reciprocity or if they establish a company in Serbia. The average prices of new construction dwellings in Serbia increased in 2022, reflecting a positive trend in the real estate market.

Buying Real Estate in Germany

Both EU and non-EU residents should have no issues purchasing property in Germany. Residents can secure mortgages from German banks, while non-residents may require a larger deposit. Non-residents may also be able to secure a mortgage with a Blue Card. The German property market saw a decline in house prices in the second half of 2022, affecting the housing market and requiring buyers and sellers to stay informed. However, experts believe that even a significant decrease in house prices will not cause significant stress for the financial system or households.

Conclusion

Investing in European real estate provides a range of opportunities and benefits, including economic stability, cultural appeal, and diverse markets. However, navigating the legal intricacies and market dynamics in different European countries can be complex. That's where a knowledgeable and experienced legal partner like Gurcan Partners becomes essential. They can provide guidance throughout the property acquisition process, ensuring compliance with local regulations and facilitating informed decisions. Whether you're considering investments in Hungary, Estonia, Poland, Germany, Czechia, or Serbia, having a legal expert by your side can streamline the process, mitigate risks, and enhance the success of your real estate ventures.

Feel free to reach out to Gurcan Partners through the following contact information:

E-MAIL: info [@] gurcanpartners.com
Gurcan Partners Hungary Office TELEPHONE: +36 1 808 94 49
Gurcan Partners Estonia Office TELEPHONE: +372 60 26 570
Gurcan Partners Poland Office TELEPHONE: +48 22 153 03 60
Gurcan Partners Germany Office TELEPHONE: +49 211 976 35 818
Gurcan Partners Czech Office TELEPHONE: +420 2 347 17 540
Gurcan Partners Serbia Office TELEPHONE: +36 1 808 94 49

Please note that the provided contact information is subject to change, so it's advisable to visit their official website for the most up-to-date details.

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