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