Mini Dubai to rewrite Budapest property market: what should we expect?
As we reported, the so-called “mini Dubai” giga investment project is launching in Hungary. The Orbán cabinet is planning to carry out an 800-million-euro infrastructure development project in Budapest’s downtown, on the Rákosrendező site. The plans involve even the erection of a skyscraper not far from the Heroes’ Square. It already seems certain that the mini Dubai could well make property prices in the surrounding neighbourhoods skyrocket.
As reported by Daily News Hungary, the Rákosrendező project has reached a new phase. Last week MÁV Plc. initiated the termination of leases and other rights of use by order of the Ministry of Construction and Transport. It also called on the users of the properties left behind or erected without permission to hand over the area.
As the first serious steps have already been taken, it is increasingly certain that there will be a huge change not only in the cityscape of Budapest but also in the capital’s real estate market. Pénzcentrum asked real estate market experts what can be expected on the market for new-build apartments in Budapest if thousands of apartments flood the market as part of the project.
Price boom is still to come
The news of the investment has not yet caused a price explosion among properties in the Rákosrendező area, László Balogh, chief economic expert of ingatlan.com, said.
He added that, according to their data, the average price of used apartments and houses for sale in the Rákosrendező area is HUF 955,000/sqm (EUR 2457/sqm), which is 2.2% higher than in December last year. This 2% increase is slightly higher than the rate shown by the housing price index of ingatlan.com for the capital.
The average price per square metre of new homes is HUF 1.26 million (EUR 3242), roughly the same as in December 2023.
The price boom has not happened yet because the project has not even physically started, so its completion is still years away,
the expert stressed.
Value of the area expected to rise
When asked by Pénzcentrum about what can be expected in the area based on previous examples, he said that there have been few large investments in Budapest like the mini Dubaj project (also called the MaxiDubai project). However, when new neighbourhoods grow out of the ground, new housing and new commercial properties spring up, which usually adds value to the area.
“In addition to the Mol Tower project or the development of the Váci Street office corridor, thousands of new homes have been built in these neighbourhoods. The appreciation of some neighbourhoods is also due to the increased ability to pay of those buying new-build apartments or those working in a new premium office building,” László Balogh said.
For example, the average price per square metre of new-build apartments around the Mol Tower in Budapest has risen from HUF 1.1 million (EUR 2831) in April 2020 to HUF 1.7 million (EUR 4375) in February 2024,
he added.
According to Károly Benedikt, Head of PR and Analysis at Duna House, a price boom is a certainty in the future. “Essentially, a whole new neighbourhood is being built here with a lot of opportunities and available features,” he said.
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