Budapest among the TOP5 in the world with the highest increase in luxury property prices
Since 2018, the price of luxury properties in the Hungarian capital has increased significantly. Let’s see what that means in international comparison and which Budapest districts exceed the prices of luxury apartments in Dubai.
The real estate consulting company Knight Frank makes an analysis every year within the framework of which it examines how many square feet of luxury homes could cost $ 1 million in some of the major cities. According to the company’s methodology, the most expensive 5% of real estate is included in the analysis.
Even though Budapest is not mentioned in the consulting company’s analysis, the price of similar flats can also be estimated in the Hungarian capital. According to the data of ingatlan.com, in the first week of March 2021, the limit in Budapest was 3,460 € / m2, at which only 5% of the properties were offered at a higher price. It means that
in the Hungarian capital, a 234 m2 luxury apartment can be bought for one million dollars.
As the Hungarian news portal g7 reports, the price of luxury apartments in Budapest has shown a significant increase in the last two years, even in international comparison. The upper five per cent limit is now almost 544 € higher than two years ago. This represents an increase of nearly 20%. As the Hungarian currency has weakened a lot in the meantime, the growth is much smaller in dollars, only 12%; however, in international comparison, even the latter is significant. There are only a few cities where prices jumped even higher between 2018 and 2020.
Accordingly, the largest price increase in the case of luxury properties can be observed in Genf with more than 17% growth, followed by Sydney (15.6% increase), Tokyo (15.5% increase), and Shanghai (14% growth).
Based on the list of ingatlan.com, Budapest is ranked as the 5th real estate market with the highest price increase in luxury homes between 2018 and 2020. The complete list can be viewed HERE.
According to the analysts of Knight Frank, the economic impacts of the coronavirus pandemic has led to entirely different developments in the premium real estate market than the crisis in 2008. Consequently, in most of the cities observed, there was an increase in luxury homes’ prices.
Still, some surprising exceptions, such as Dubai, whose price drop is interesting because there are already two districts in Budapest where, theoretically, luxury homes are more expensive than in the Emirates.
Read also: Property Market UPDATE – These are the most luxurious districts of Budapest
In both the 5th and 1st districts, only a smaller luxury apartment could be bought for $1 million than in Dubai.
Of course, there are huge differences between the Hungarian districts. In the city centre, for example, the most expensive 5% of apartments start at 5,720 € / m2, but the same does not even reach 2,725 € in the 14th district or 21st district of the Hungarian capital.
The TOP10 highest square meter prices in Budapest can be ranked accordingly:
- 5th district: 5.76 € / m2
- 1st district: 5.28 €/ m2
- 12th district: 4.57 € / m2
- 2nd district: 4.53 € / m2
- 6th district: 4.02 € / m2
- 7th district: 3.3 € / m2
- 11th district: 3.23 € / m2
- 3rd district: 3.19 € / m2
- 13th district: 3.07 € / m2
Read alsoProperty prices in Budapest are expected to rise this Summer
Source: g7.hu
Explanation of why this somewhat questionable representation of Budapest being in the top 5 of the worlds sales in luxury property, is through foreign players, dominating this category of the Hungarian property market.
This area of the property market, which did filter throughout all levels layers of the property markets from 2019 through to February 2020, causing levels of property values to reflect falseness based against other major economic indicators and the over supply of properties for sale and rent in Budapest, which currently, inclusive of the on-going novel coronavirus, has the property market values in a strengthening downward spiral trend.
The downside of the property market prices in Budapest, Hungary is still off its bottoming out – which could still record a further 10% drop from current sale price indicators.
Budapest, Hungary property market dominators, in order the following (3) three countries :
– (1) – Chinese.
_ (2) – Vietnamese.
– (3) – Germany.
Question is, they purchased properties in major part for Rental purposes.
Bit of heavy debt they are carrying from there investment and the vulnerability and growing concern uncertainty of the Hungarian economy.
In addition, the high probability of further pain from lack of tourism and the over supply of rental accommodation and properties on the market for Sale in Budapest, Hungary.