Hungary’s estate market news – Not enough properties, no demand for overpriced ones

According to vg.hu, a significant demand for building sites on sale in Budapest and its agglomeration evolved last year mainly due to the VAT decrease and CSOK (the government’s housing subsidy scheme). The question is: could you find a site for sale in the capital and its vicinity if you started looking?

The situation is quite different in Budapest and the agglomeration. While you could choose from several sites in the 18^th district or Érd, the supply is moderate in the 4^th and 15^th district, and there’s basically nothing left in the 11^th district. What’s left, at least, is horribly overprized.

The buyers are mostly investors

It’s not surprising that investors’ presence is dominant nowadays: at least 60% build condominiums, terraced houses or semi-detached houses to then market them – concluded Csaba Nagy, the regional director of Balla Estate Offices’ South Buda offices. They are looking for sites without big ground-spaces that still have the possibility to be built in.

Where can you find building sites for sale?

The more we are inside the capital the harder the task becomes. For instance, all sites with good value have been sold out in the 11^th district. You can only find sites with good parameters that are obviously overpriced.

Despite the big demand even investors don’t buy these overpriced estates, because beyond a certain price those wouldn’t profit enough, so it’s not worth it. Even though many people stick to certain neighbourhoods, if they only find overpriced estates they simply move on.

The selection is wider at the outskirts and in the agglomeration. This is the case with South Buda, where you can still find affordable sites with acceptable facilities, like in Érd or Nagytétény. Although you won’t find sites in the centre of Érd, the selection is great at the outskirts of the settlement.

There are newer and newer available building sites on the estate market in the 18^th district. Old houses get demolished, while there are still locations where the municipality is developing new building sites. These include the Saint Imre garden suburb and the properties developed at the onetime Russian barrack, where mostly investors are present, building semi-detached houses. Moreover, properties go on sale in Almáskert as well, and you can also calculate with the rebooting of the developments that were stopped during the 2008 crisis. Some of these have already been restarted.

The prices

The supply and the demand is much more balanced in the agglomeration and the outskirts of the capital than in the inner districts. You could find sites for 8 million forints in the South Buda agglomeration, which is 75% of the price of a building site in the 11^th district. You have to pay almost 30 million forints for a 500 m² property in Budafok, though the conditions are truly outstanding there. However, you could purchase a building site in Nagytétény for the half this price.

In North Pest, the price of 400-1000 m² sites in the 4^th and 15^th districts start from 15 million forints, which can get as high as 40-50 million.

The average square metre price of estate properties are around 25 thousand forints in the 18^th district, which means that it varies between 15 thousand and 45 thousand. This can even reach 50 thousand in the most popular quarters, like the Saint Imre or Ganz garden suburbs. You’re likely to find lower prices in the Almáskert, Szemere settlement, Erzsébet settlement and Béla settlement regions. This means that a 550-800 m² building site costs about 17-30 million forints in the 18^th district.

According to Csaba Nagy’s expectations, the supply and demand will meet sooner or later, so owners will either lower the prices or never sell their estate properties. It’s worth keeping track of the estate market, because acceptable offers might occur.

Copy editor: bm

Source: http://www.vg.hu/