Budapest District VIII

Apologies..

I have purchased a bed bedroom apartment with balcony in district X1. The name of the apartments are White Castle and they are located in Fehervari Street. I also purchased an indoor car space. The cost of the 2 came to 67k approx. This was purchased in feb 04 and is now at the handing over stage....I bought off the plans and have never been over. I know this is a no no, but i was took in by all the hype at the time. A bit late now to ask, but what are peoples opinions on this investment??? I have in my mind rent in the region of 300 euro?? Is this feasible??
 
Hi Eddie,

Is it a one bedroom apartment?

A lot depends on whether it will rent easily. Is it facing Fehervari ut, which is a noisy street or is it facing a green courtyard? 300 euro per month sounds reasonable but you'd need to furnish it well and it would need to be quiet. This part of XI isn't particularly attractive but it is close to various businesses, which are located closer to the Danube on the Buda side. There are also some business parks such as 'Infopark' nearby but you're right to have paid extra for parking as this is essential in a development like this.

This is not a particularly desirable area to live in, but as a purely financial investment, it might make sense.

Budapest
 
Thanks Budapest. Thats very helpful. It is a one bed apartment. I actually dont know off hand whether it faces the main road or a green area, but i will find out over the weekend...(you'd think i'd know this!!!)
 
Would anyone know is there a reliable source/index of property price increase(decrease) in Budapest?

Are there many newbuilds(less than 3 years old) being resold on the secondhand market? How are they stacking up against older apartments?

Many thanks
 
Here's a link to a RICS document, which gives figures for property price increases in several European countries, including Hungary. It suggests price increases of almost 10% for last year, which sounds about right for quality investments.

http://www.rics.org/NR/rdonlyres/1E692728-A27E-4DA6-9E34-436B3719A389/0/pr021behr_06.doc

I haven't seen that many new builds being resold on the second hand market just yet, as most have been built within the last couple of years or are still in the process of being built. For those two or three that I've noticed close to where I live in District VI, the price seems to be similar or slightly less than when new.

Budapest
 
Budapest,

Thanks for the link.

With so many vested interests it's sometimes hard to know what's exaggerated hype or factual.

Donking
 
I agree guys,
been following the 9 pages of posts, and heres my snapshot of the Budapest market, as an owner:

- Buy small, and buy central. I bought a 1-bed in dis. 6. Stay in 5, 6 or 7. I paid €1,600 per sq.m; and I think it could have been over the odds. That said, all the agents here in lireland are up about 1900-2200 sq.m for district 6 at the moment!!!)
- DON'T BELIEVE A W O R D THAT AGENTS TELL YOU:
- rents never go over 500, even for a 3 bed. Only expats rent apmts in Budapest. Why would any of them need a 3-bed??! hence buy small if you expect to rent
- Even for a 1-bed, don't expect the rent to cover any repayments you may have. I have a 55k mortgage on my place, with repayments for 300 pm. Remeber that if i rent for 300 pm, I will have to pay 20-25% in tax, and 10%+ in management fee's; so you are 35% down straight away; before the money reaches your a/c.
- Look at the Hungarian rental sites, for good indications of rent. Just like you would look at daft.ie for Irish rental prices.
- also look at the english versions of the hungarian newspapes. they keep easily searchable archives of all articles. (budapest Sun, Budapest Times, Budapest Business Journal, etc).
- Capital Appreciation is NOT 15-25% in Budapest. 10% sounds about right, but some say its more like 5% (2% above inflation).
- Budapest is a 10-year purchase at the moment, with the big appreciation move expected to come when Hungary join the EURO. This enables Hungarians to take out mortages in euro currency, at euro interest rates. European banks will also enter the hungarian market.
- The agents say Hungary will join the euro in 2010. This is now almost certainly off the mark. Looks more like 2011 at earliest, but more like 2013.
- Guaranteed rents are always a scam, in any country. The 3 years of rent they promise you are top-loaded into the price of the apartment; so you are in effect paying your own rent )

- Don't let these things scare you off though, just be aware of them, so you can avoid being shafted. Budapest is a gorgeous city, and as long as you are in it for the long term; you will own a bit of a city that is going to be on the move for the foreseeable future. Budapest looks to be the economic center of eastern europe, possibly more so that Prague and Warsaw, as Budapest was always very progressive, and not quite as attached to Mother Russia as the other countries in the bloc. Also, the legal system is VERY similar to the Irish system - solicitor gets 1%, agent gets 3%, they have land registry and

- I'm very happy with my purchase, but to be honest, 18 months on, I haven't a clue what its worth, i.e whats its appreciated (or depreciated! remember I bought into the hype from 18months ago, only now realising the truth).

Do the research.

/pd
 
paddyd said:
- rents never go over 500, even for a 3 bed. Only expats rent apmts in Budapest. Why would any of them need a 3-bed??! hence buy small if you expect to rent
Click to expand...
I agree with you that ex-pats are the main renters of city centre apartments in Budapest, but rents can go over 500 euro per month for high quality apartments. 3-bed apartments are more difficult to rent out but sometimes, e.g. three foreign students might want to rent together to save money.
 
Just signed up to the forum this morning- the comments have been very helpful. We are going out to Budapest in 2 weeks time for the weekend and are looking exclusively at classic apartments in 5,6 and 7. Any recommendations on the best way to approach the trip? We are considering two agents- euinvest and duna house. Have seen details on some properties in 7 which are outside the ring road -Podmaniczky utca, Jokai utca and Sviz utca. Anyone know if these are good or bad locations? Greatly appreciate any advice.
 
HI deli,

Podmaniczky, Jokai and Sziv utca are all in District VI. You have to be very careful about which street you choose around here as some of the streets in District VI (Podmaniczky, Szondi and between) are not very desirable. If you can afford it, I'd recommend that you get somewhere on a quiet street in District V or certain parts of VI such as close to the opera house or Andrassy ut.

Budapest
[broken link removed]
 
Budapest,
whatever happened to that Ballymore properties investment in a huge retail/residential/commercial property in the Railway yard opposite the Westend ceter, beside the Ferdinand Bridge? Heard there was a legal challenge from a local company, but that this was sorted out a short while back (?). This was part of my reason for buying in the area; as I knew of this development before it was oficially announced, so bought closeby (just at the Andrassy side of a street intersecting Szondi). If this was the case, then the 'Podmaniczky, Szondi and between' would be pulled up a bit i suppose
 
Hi paddyd,

Not sure what is the current situation with the Ballymore development. Nothing has been started as yet.

Szondi/Podmaniczky is not a desirable area at the minute. New investment will hopefully improve it, so Ballymore along with new residential buildings such as Szinyei Merse Haz should help.

Budapest
 

Hi there Paddyd,

That's a very good post. I bought a couple of Apartments in October 2004 and I would agree totally with all your comments. At the time I did get some advice indirectly from a researcher connected with the IDA and they suggested a timespan of 8 to 15 years for significant appreciation rather than the 3 to 5 years suggested by the various estate agent at the time. A timeframe of 8 to 15 years was acceptable to me so I pushed ahead with it.

Donking
 

heres the answer )
http://www.budapesttimes.hu/index.php?art=1644

seems the local builder won an appeal to state his claim of ownership to the land; but Ballymore intend appealing to the supreme court.
I think that once this site is developed (whomever develops it), then that area can only benefit GREATLY; esp given the scale of the retail/commercial development proposed.
 
It seems that if Polus, the Hungarian company end up with possession of the site, that it will only be a similar sized extension of the West End Shopping Centre, which they built a few years ago. While this will no doubt be good for the area, I don't see it as having a huge beneficial effect.

Ballymore's plan seems to be more interesting as it also incorporates luxury residental buildings.

Szondi utca, for example, is not very close to the development, so I can't see the street transforming its image because of it.
 
I agree, these things don't cause over-night change in an area; infact there may be little change whatsoever. But they key thing is that there is always an associated lift.
In other words, anyone renting at the moment near for exampe Sziv ut (i think you said earlier thats where you are living at the moment) could say 'within walking distance of Westend center'. Which is completely true. It creates an association with a landmark or local amenieties. Would it be harder to rent Sziv ut apartments if Westend did not exist? Probably.

When the new site is developed, it will be an additional focal point for the area, and these type of things make renting an apartment just a little easier in that area. Anyone familiar with the 'Ballymore' site we're referring to know that it is a truely huge site, with real potential.

One thing i've found is that renters are, in general, lazy (i know i certainly was), and they will always prefer to rent close to shops and amenieties (why not). In addition, renters don't tend to have car's, as they can rent near public transport. (Again, Sziv/district 6 is very well postioned for this, between 2 metro lines). It makes life easier for the renter, at no real additional cost.

/pd
 
Great post paddyd !
Just a few comments:

1900-2000 is a rip-off IMO
I paid 666 in district VIII on korut
and 733 in VI close to Liszt Ferenc Ter
paddyd said:
- DON'T BELIEVE A W O R D THAT AGENTS TELL YOU:
Click to expand...
Absolutely, they talk an awful amount of s****e
I've been told the following common lies:
"apartment comes with reserved parking space "
"building will be renovation next year"
"lift will be going in next year"
"street will be pedestrianised next year"
My friend bought a place at 80sqm, when measured it was actually 74sqm

It's best to get the number of the house representative,
and ask them any questions.

paddyd said:
- rents never go over 500, even for a 3 bed. Only expats rent apmts in Budapest. Why would any of them need a 3-bed??! hence buy small if you expect to rent
Click to expand...
You'd be lucky to get about 500, although I know someone renting
at 550, for a 2 bed, and 700, for a 3-bed.
paddyd said:
- Capital Appreciation is NOT 15-25% in Budapest. 10% sounds about right, but some say its more like 5% (2% above inflation).
Click to expand...
yeah 10% at best. fingers crossed for the EURO

HD
 
harryd said:
and 733 in VI close to Liszt Ferenc Ter

HD
Click to expand...


HD would you mind giving a little more info on the property near Liszt Ferenc? When did you buy? Was it second hand or new? What condition/floor? What condition of building? What street?

Many Thanks
 
I completely agree with you, Harryd. The best thing is to talk to the house representative about any issues such as renovation plans for the house. Some agents don't tend to give accurate information. However, the whole situation is getting better. Only a few dishonest people tarnish the industry. Most people I've dealt with have been honest and upfront about plans for the building/street, etc.

In my opinion, prices vary a lot over here but most of the variations are due to very specific reasons. To use the example of Liszt Ter, on nearby streets such as Hegedu utca, it's possible to buy run down apartments in buildings, which are in dire need of renovation for quite a low price per square metre. However, three mins walk from here, on Liszt itself, prices are high as this is mainly a market aimed at foreigners. I don't think that either is necessarily a bargain or overpriced as they are two totally different markets.

Budapest
 
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