In the last few years, foreign investors had a significant role in the Hungarian real estate market. Accordingly, many properties have been purchased in the city centre of Budapest for short-term rental and investment; however, this situation has changed dramatically due to the coronavirus pandemic.
Based on the data of the Central Home Network – real estate specialist in the city centre of Budapest – the declining trend started last year. In 2019, the number of Chinese investors decreased slightly in Budapest’s real estate market. Most of them were looking for properties with a living room plus 1 or 2 bedroom layout, in the price range of 40 and 80 million. The highest demand could be observed in the case of AIRBNB-friendly apartments in good condition, ready for immediate use without renovation, by which they could realise a quick return on investment. Besides Chinese buyers, the Vietnamese buyer group was also very active in such investments. Thanks to their fast decision-making attitude, such sales were carried out within a few days. However, with the arrival of the coronavirus, the whole market turned upside down.
Therefore, both Chinese and Vietnamese buyers are still waiting with further investments in the city centre of Budapest.
According to Ben-Ezra Orran, an expert at Central Home Network, “the time of overpriced apartments is over, they only buy at a price that is right for them too. Presumably, we can expect some price reduction for a long time, so in the meantime, we can only expect a limited number of these customers.”
Due to the epidemic situation, the closing of the borders in recent months did not help the real estate market movements either; property purchase could only be realised by Chinese and Vietnamese investors already living in Hungary. Even though the economic downturn and the drastic decline in tourism have rearranged the plans of many investors; in the spring months, some successful sales were carried out at Central Home.
As ProfitLine reports, property purchase was realised in the case of special flats; however, decision-making cycles were extended, the whole process was much slower than previously, and it was more challenging to finish the negotiations.
The expert expects that the second half of the year will be significantly more reliable, with more successful transactions; however, this will require the resumption of travel and the ability to come in person to look around on the market. As far as sellers are concerned, they will undoubtedly need more willingness to compromise and flexibility in order to sell their property successfully.