Budapest’s city centre apartments are expensive because of the Hungarian investors?
According to Balla Ingatlanok’s recent survey prices are still getting higher and higher in the city centre (District V, VI, and VII) due to the investors, but not for long. The prices have increased enormously because of the small investors who were discouraged by the brokerage scandals, and because of the short-term investors, but the market will be stabilized soon, writes index.hu.
In the past couple of months most of the investors were Hungarian, and only 20% of them were from another country; in the city centre, almost 2/3 of the buyers purchased apartments for investment purposes in the last six months. There are two reasons for that; 1. property investment became a trend, and 2. compared to other investments, property is still more reliable than anything else.
Investors, as opposed to ordinary buyers, can make decisions incredibly fast, while others would like to visit the apartment a couple of times, they have to talk things through with their family, and they have to pay a visit to the bank as well. It can take weeks. Investors, however, can decide on the spot, in 5-6 minutes if they have to, to buy a property.
It means that as soon as a favourable apartment appears, investors buy it immediately, making it hard for ordinary buyers to find great apartments at a reasonable price and also, they have to make a decision way faster than before.
For the seller it is an absolutely great situation, as they can sell their properties in no time. However, overpriced apartments will still not be sold, despite of this new trend. Investors will only buy apartments that have a great price-to-book ratio.
Investors usually let their apartments to short time tenants, meaning Airbnb, which reduces the market with a great deal and makes the few remaining apartments overpriced.
Prices have risen dramatically; an apartment that cost 100.000 HUF/month before can cost 130-150.000 HUF now, depending on the area and how well it’s equipped. Most tenants are looking for smaller apartments which usually cost 80-150.000 HUF in district VI and VII while those who want to have a two-room flat might have to pay 100-160.000 HUF/month.
A reasonable apartment costs at least 300.000 HUF/m2 in District VII, depending on which part of the District the property is; party quarters are more expensive, meaning that flats cost twice as much as elsewhere, and the best ones can have a 800-900.000 HUF/m2 price. The price of small and medium sized apartments has increased the most, opposite to larger apartments’ 5-10%.
District VI had a more serious raise; it is impossible to buy any properties under 350.000 HUF/m2, and apartments in a newly built or renewed block of flats are more expensive: they cost at least 500.000 HUF/m2.
District V is the most expensive part in the city centre; prices start at 400-450.000 HUF/m2, but those apartments which have a panoramic view to the Danube can reach 1.000.000 HUF/m2, too. District V has fewer apartments, than District VI, as it has a great number of offices and bureaus.
According to Balla Ingatlanok, this trend will soon stop as the student and tourist season is over, and the market will get stabilized next year.
based on an article of index.hu
translated by Adrienn Sain
Source: index.hu
