Today we need an expert and appropriate pricing if we want to sell our property successfully on the downtown real estate market, since the supply increased to a vast size, and buyers really consider what they buy.

According to Origo, the demand came to a steady halt on the downtown real estate market, so much so that property owners have to decrease advertising prices to such a level that their properties become eligible for sale. The interest is solely on those properties that appear on the market at a realistic price – summed up Zoltán Schneider, professional leader of the downtown office of Balla Ingatlan (Balla Estate).

This is indicated as well by his experiences according to which more and more people ask for the help of real estate agents in marketing, because, among other things, they are not able to assess the real value of their property.

Namely, because they can no longer proceed from advertising prices and average prices displayed on advertising websites since those do not paint a realistic picture of the market anymore. And there are no buyers for these properties priced according to, or rather we can say, overpriced according to these data.

As he said: it is no strategy today any more to “advertise it at a high starting price, and someone will eventually buy it since it is not urgent.”

Because nobody is buying an apartment like that. The expert mentioned an example where a previous agent advertised a property at 220 million forints at the start, and now, after an evaluation made by them, it is at 159 million, but even then it will not be easy to sell.

So the evaluation period has not only become longer, but it is simply impossible to find a buyer for properties at an advertising price too high,” emphasised the expert. At the same time, if the price of a property reaches a realistic level, it is bought almost immediately. According to Zoltán Schneider, this slowly dawned on property owners, and they started to listen to real estate agents about the importance of the appropriate pricing.

Stagnating prices are more and more apparent in the case of downtown properties.

Concerning square metre prices, this is varying, but at the same time, average square meter prices remain below one million forints in the downtown area as well.

He further eluded that the decrease of demand was not prompted by prices too high only but the appearance of such investment opportunities as the so-called “super sovereign security,” namely the Hungarian Sovereign Security Plus.

This lured away many buyers from the market since if someone lets out their property legally then they can reach a 5-7 per cent output which is rather similar to the possible output of sovereign securities,” he explained. Moreover, that is a more straightforward investment than property and does not necessarily require the use of such a large amount of money as the amount a downtown property costs and thus it is appealing for smaller investors.

Additionally, another contributor to the decrease in demand is that the previous property letting fever for a short amount of time ceased to exist since many buildings forbid this activity, regulations changed, and the market is full as well. Of course, there still are investors who seek properties for this purpose, but they tend to be the type of investors who already operate 3 or 4 other units as well.

They pursue this seriously, business-like instead of trying to invest their savings of a few million somehow.

However, it is characteristic for a long time letting that there is a shortage of apartments for rent and the rent is remarkably high. While in previous years those interested in renting an apartment on the downtown real estate market usually appeared in the summer, they now disappeared completely because they come in vain to inner districts, they will not find apartments for rent.

Nor would they be able to afford it, since the category of the 100-120 thousand apartments they seek does not exist on the market.

Concerning the future the expert said at last; the real estate market is like a cargo train: it takes a long time for it to stop. But it is evident that it stepped on the brakes. And even if prices will not decrease in the next six months, stagnating is sure to be expected.

By Réka Tóth

Source: www.origo.hu

4 comments
  1. what is your source????? Why are the prices in dowtown than 100M forints for 50sqm appartment??

  2. in life people get greedy and want a fast buck. It’s also true that some teal estate agents go crazy and publish stories of 20% year on year growth. That’s great for advertising purposes but who is realistically going to want to buy a property when there has been a 20% uplift the previous year? Please deal with proper agents who will give you a real market price for your property and will sell it. No bull***, no exalted expectations. Proper people doing proper work. Once there is a dip in the market the cowboys will run.

  3. Im a property developer and experienced the market is over priced. Buying a property that needs to be renovated costs the same as one that’s already renovated. If you find one, un renovated you will soon workout, that it doesn’t pay out to renovate as costs will become more than a property already renovated. Conclusion is that the cost of properties are at least 20% overprized already. I had developments in 5 countries and this is the first where there are no profits to make unless you can fool a foreigner to buy youre property. Hungary had an investment scheme where you were able to invest in a residency and they took it away now. Therefore the Russians and Chinese cant be screwed over anymore being forced to buy a property that is not really needed at over priced rates. It will take at least 5 years for the market to calm down, until they would need foreign investment again. Only good enough for the Hungarians if they want our money. They running out now again and most skilled Hungarians has made a runner to more stable countries already. This will become a ghost town again. Believe I can see it happening. Foreigners have come back for holiday in the last couple of years, but starting to realise, its becoming the same costs as going on holiday to a first world country. I know Hungarian property owners that tried to sell they property down town for a 100 million plus a year back. They couldn’t sell it and are even trying now for 80 million. Still no interest and if I had to make an offer they would take 70 million. Im still not sure if its worth it. Maybe if you want to start an Airbnb, but do know that you will only pay you place back with the funds invested. You cant make profit. Its imposable. Take It from someone who invested a lot of money in this country. I made about 5% profit over 2 years and I regret it. I could have made more in other European countries with less struggle. Luckily I am out and didn’t invest this year as I would have lost this time around. Bubble has burst.

  4. The biggest sign that something bad going to happen is where more and more newly built flats are in the size of a send box even less than 30 M2, if nobody really can buy flat lets make them smaller, this is the whole story.

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