With the economic recovery from COVID-19 pandemic and the rising inflation in Europe, real estate investment has become an attractive option for investors looking to hedge against currency devaluation and generate stable cash flow. However, not all European countries are equal when it comes to real estate investment opportunities. Based on factors like economic outlook, real estate market conditions, and government incentives, Hungary, Poland and Spain stand out as the top countries for real estate investment in Europe in 2023.
Hungary offers a pro-business environment and government subsidies for real estate investors
Hungary has a very favorable environment for real estate investment. The country has a pro-business government that provides subsidies and tax incentives to attract foreign capital. For example, investors can get up to 200 million HUF (about 600,000 EUR) in cash subsidies for real estate projects that create a certain number of jobs. Hungary also has a flat 9% corporate tax rate, one of the lowest in Europe. Its real estate market has good growth potential, with increasing demand and constrained supply in major cities like Budapest. The relatively low property prices, combined with high rental yields of 5-7%, make Hungarian real estate an attractive investment target.
Poland’s strong economic growth and undersupplied housing market provide opportunities
Poland has been one of the fastest growing economies in the EU, with GDP growth averaging over 4% in the past decade. This economic expansion, together with EU funding and a large domestic market, has led to a undersupplied housing market, especially in major Polish cities like Warsaw and Krakow. For example, there is an estimated deficit of 1.5 million housing units in Warsaw. For real estate investors, this supply-demand imbalance means strong price appreciation potential and attractive net rental yields of 5-8% for residential properties in Poland.
Spain’s Golden Visa program incentives real estate investment from overseas buyers
Spain offers a very popular Golden Visa program that grants residency rights to non-EU investors purchasing real estate worth 500,000 EUR or more. The visa program has attracted significant foreign capital, especially from China and Russia. While the pandemic dampened demand briefly, the market has rebounded strongly, with property prices rising 14% in 2022. Major cities like Barcelona and Madrid offer exciting opportunities for real estate investment, both for Golden Visa seekers and buy-to-rent investors. But valuations remain attractive, especially compared to other European markets.
For real estate investors looking at the European market, Hungary, Poland and Spain stand out as countries with strong fundamentals, favorable incentives, and good growth potential in 2023. Each offers unique advantages, so investors need to do in-depth research to identify the best opportunities.