Coronavirus – The pandemic has reached the Hungarian real estate market
Although it is difficult to estimate the results of the coronavirus on the global economy, entertainment and tourism, the pandemic would certainly affect these three major areas of each country severely. The real estate market of Budapest reacted to the situation immediately.
Világgazdaság reported that after the first coronavirus case was reported in Hungary, the number of available flats in two weeks increased by 4% up to almost ten thousand.Â
Most of the available flats are hostels which can be rented for a short period by foreign tourists visiting the capital.Â
These flats remain empty until the end of the pandemic, and no tourists are expected to visit Budapest in the following months. These kinds of hostels can be either rented or sold by the owners to anyone interested, but mostly to tourists who do not stay at hotels.Â
The number of available flats in District 6, which is the most popular area of tourists in Budapest, increased by 8% since the beginning of March.
In many districts of Budapest, the prices of flats decreased since the outbreak of the coronavirus by 1-4%. Still, the average renting price has not changed (165 thousand HUF / 451 EUR) and the number of flats under 100 thousand HUF (300 EUR) also increased.Â
Read alsoBudapest turned into a ghost town amid pandemic – VIDEO
Other major Hungarian cities like Debrecen, Szeged, NyÃregyháza (where many university students live and learn) have not shown any changes yet.Â
Featured image: www.facebook.com/rizsavitamas
Source: www.vg.hu
A hostel is usually a place where there are dormitories shared by people who usually do not know each other. A short term flat rental is usually within an Aparthotel or an Airbnb, booked by an individual or group of individuals who know each other. A flat is not a hostel and vica versa. Thus the article saying ‘most of the available flats are hostels’ is nonsense.
English lesson over, the proliferstion of Airbnb’s has had a negative effect in many cities so many city authorities including Amersterdam, Paris and Barcelona have begiun clamping down on Airbnb rentals. Budapest has also been mulling the tightening of rules on Airbnb’s (source Hungary Today 2019.07.29).
It is possible that as a result of this pandemic crisis, market forces (as in lack of tourists) will do what the Budapest authorities have so far not succeeded in doing. Landlords faced with empty Airbnb properties, often bought on mortgages, will have 2 choices: sell their flats or rent them to locals at the going market rent per calendar month.
As Warren Buffett once remarked, “when the tide goes out, one can see who has been swimming naked”. The tide has gone out for the Airbnb market, at least for a while.