60 new gated communities to be built in Hungary

Gated communities are getting more and more popular on the real estate market, more than a thousand flats are waiting to be sold in Hungary. At the moment, sixty new gated community projects are underway, the biggest among them being the Corvin Átrium, place to 551 new homes, informs index.hu.

In the Hungarian capital during the past three-four years more than a thousand new homes were built in gated communities, this number is expected to rise up to 10-13 thousand by 2019. In Budapest and its surrounding area, the prices of these flats per square meter are usually 2000-2500 euros, in the bigger Hungarian cities, it is around 1500 euros. Based on this, people who live in gated communities are mostly those who have a steady and high income.

Nándor Mester, chief analyst at Otthontérkép.hu, claims that, based on the past eight-twelve months, 20-40 percent of the apartments are sold to investors before construction begins, some of whom, shortly after the completion, sell those earning a good profit. However, the majority of these investors usually rent them for the period of three or four years before selling.

According to Otthontérkép.hu, the vast majority of the competitors on the gated community market are big companies, although, if considering the numbers, almost 70 percent of the projects are carried out by smaller developers. The reason behind this is that small companies take a higher market- and financial risk, thus it would not be worthy to engage in projects involving more than 60-100 flats. Besides the small enterprises, the market is full of big ones that concern projects with a couple thousand apartments, such as the Corvin Átrium, where 551 homes are expected to be ready by the end of next year. This is followed by the Allure Residence Budapest with 530 flats, built in the IX. district, then comes the Budai Bolero with 443 homes in the first quarter of 2018, and lastly, one in Virágvölgy with 400 apartments.

Nándor Mester concludes that the popularity of the gated communities could be thanked to the reducing of the value added tax (VAT) and to the Family Housing Allowance. Based on surveys, gated community flats are most popular among urban couples under 35 belonging to the upper middle class, with maximum one child, although 25-28 percent of the buyers are above age 50, or are making the purchase for their children.

Originally, gated communities were suburban house factions, but in Hungary it rather means 6-8 story apartment houses, usually surrounded by parks. Even though gated communities are gaining popularity in Hungary, they are frequent mostly in Budapest, with a couple projects launched in Győr, Debrecen, Miskolc, Kecskemét only in the past two years.

photo: Csaba Jászai / MTI

Ce: bm

Source: index.hu