Owning garage has become a luxury in downtown Budapest and some other Hungarian rural municipalities. It costs almost as much as a studio apartment 6-7 years ago, and there is a shortage. Thus, owning a garage may generate higher profit than an apartment. And that shortage concerns storages in condominiums. These two investment targets are now the best choices in Hungary.
László Balogh, the leading analyst of ingatlan.com, said garage prices increased 20-25 percent every year in the last seven years. However, the price rise concerning apartments stopped one year ago, index.hu wrote. The garage price increase did not. Since the number of cars increase, finding a safe parking place is a growing problem for car owners. Investors do not have enough money to create enough parking places under or near the new buildings. As a result, they pay extra fees to the municipal council, but that does not solve the problem in the long run.
People would like to rent a garage because of the growing parking fees and the shortage of parking lots, Ferenc Farkas, the CEO of Ingatlancsoport Ltd, said. As a result, garage prices skyrocketed in the last few months. According to ingatlan.com’s László Balogh, garage costs increased by 20 percent in the last 12 months. In the downtown, the increase is 50 percent compared to 2020.
In some districts, the average price exceeds HUF 2 million/sqm (EUR 5,378/sqm). In the Buda Castle district, even HUF 2.4 million/sqm (EUR 6,454/sqm) is not exceptional. That means you must pay almost EUR 54,000 for a garage there. In the 5th district, the heart of Pest, there is no garage for sale, Mr Balogh added. That price goes below HUF 170,000-200,000/sqm (EUR 450-500/sqm) in the outer districts.
Thinking about investing in Hungary? Here is why you should buy garages, storages
The average sale price in Budapest is HUF 7.4 million (EUR 19,905), while the rental price is around HUF 25,000 (EUR 67.25). In the rural cities, those numbers are 5-10 percent lower. From the middle of the 2010s until 2020, investors could realise a 1.5-2 times higher profit on garages than on apartments.
Furthermore, the money you need to invest is much lower, so the segment has become popular. Moreover, if somebody does not pay, you can easily throw them out. That is much more difficult in the case of apartments and houses. Finally, garages are not affected by the government’s modifications concerning the utility price scheme. Therefore, today, two garage businesses out of three are due to investment reasons. Empty garages find new tenants in 1-2 months, and more people would like to buy garages than sell them.
Currently, there are 8-900 garages for sale in Budapest, most of them in the outer districts. The number of garages for rent is higher. In the municipalities, those numbers are 500 and 400.
Storages in condominiums are also very popular. Their sqm price sometimes reaches 50 percent of that of the apartment.