Does anyone have any figures on what was in the Indo at the weekend about the downturn in Hungarian property? Seems that there is greater supply than demand. It seems to be similiar to Istria in Croatia where there are more built properties (new) than are actually needed for rentals and a whole lot lying unsold. Is this the SSIA effect, where everyone is converting their savings into holidays, hairdos and cars, and into top up accounts, or is it just the Hungarians tightening their belts?
Budapest Downturn
- Thread starter almo
- Start date
The Sunday Independent article doesn't say anything that most people in Budapest haven't known for years - that more new build apartments than potential buyers have been constructed in either outlying areas or in undesirable locations within the city. These typically overpriced, low quality blocks of apartments are not wanted by either Hungarians or foreign investors and for the past 2-3 years (not just in the last few months as the article suggests) there have been problems selling such properties.
The Budapest market is very much fragmented and centrally located, quality apartments seem to have been selling well recently. Market experts predict capital apprecation in the region of 8% for such properties for this year. Typical examples are well priced, renovated apartments on quiet streets in District V, which are desirable to both buyers (Hungarian and foreign) and expat renters alike. In terms or renting, there continues to be a deficit of well furnished, well located properties available.
The idea that asking prices are negotiable is one that has been part of the Budapest market for a long time and is not just something that happened recently. There is usually some scope for a minor reduction in the price being asked for any residential property.
That said, in my opinion, the Budapest market is not likely to rocket anytime soon. Instead, high quality investments should rent well and provide a return of approximately 6%. In terms of capital appreciation, they should increase in value consistently at somewhere between 6-10% per annum. Lower quality properties are likely to stay stagnant or even decrease in value (as has been happening for the past couple of years).
Prohibitively high interest rates and the possibility of not being able to borrow a large percentage of the purchase price will mean that Hungarians will continue to find it difficult to purchase residential property until either local banking policies change or alternatively, they gain access to ECB rates and Western lending policies.
The Budapest market is very much fragmented and centrally located, quality apartments seem to have been selling well recently. Market experts predict capital apprecation in the region of 8% for such properties for this year. Typical examples are well priced, renovated apartments on quiet streets in District V, which are desirable to both buyers (Hungarian and foreign) and expat renters alike. In terms or renting, there continues to be a deficit of well furnished, well located properties available.
The idea that asking prices are negotiable is one that has been part of the Budapest market for a long time and is not just something that happened recently. There is usually some scope for a minor reduction in the price being asked for any residential property.
That said, in my opinion, the Budapest market is not likely to rocket anytime soon. Instead, high quality investments should rent well and provide a return of approximately 6%. In terms of capital appreciation, they should increase in value consistently at somewhere between 6-10% per annum. Lower quality properties are likely to stay stagnant or even decrease in value (as has been happening for the past couple of years).
Prohibitively high interest rates and the possibility of not being able to borrow a large percentage of the purchase price will mean that Hungarians will continue to find it difficult to purchase residential property until either local banking policies change or alternatively, they gain access to ECB rates and Western lending policies.
Raskolnikov
Registered User
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- 351
http://irishproperty.blogspot.com/2006/08/property-slump-in-budapest.html
Some analysis on the aforementioned article here, it seems that native Hungarian buyers are being frozen out due to rate hikes and this has led to a fall in prices.
Some analysis on the aforementioned article here, it seems that native Hungarian buyers are being frozen out due to rate hikes and this has led to a fall in prices.
A family member owns an apartment centrally located near the opera in an old building in Budapest, bought about four years ago. He has renters right now although the income isn't great, there's no mortgage on the property.
I'm not sure, given this instability, whether this might be a good time to sell. It was originally supposed to be around a 10 year investment. What are your opinions on this?
I'm not sure, given this instability, whether this might be a good time to sell. It was originally supposed to be around a 10 year investment. What are your opinions on this?
Po' Boy,
For the past 3-5 years, Budapest has been a long term investment of a 10-15 year duration and it makes little sense to sell property in the Budapest market in the current climate. The recent negative publicity about the Hungarian economy has come as little surprise to most of us, who've been living in Budapest for the past few years. The Sunday Independent and SB Post articles have just rehashed what has been published locally at least 1-2 years ago and offer little in the way of new insight. These articles give a very general view of the current marketplace and don't take into account the very fragmented nature of the Hungarian property market.
Budapest
For the past 3-5 years, Budapest has been a long term investment of a 10-15 year duration and it makes little sense to sell property in the Budapest market in the current climate. The recent negative publicity about the Hungarian economy has come as little surprise to most of us, who've been living in Budapest for the past few years. The Sunday Independent and SB Post articles have just rehashed what has been published locally at least 1-2 years ago and offer little in the way of new insight. These articles give a very general view of the current marketplace and don't take into account the very fragmented nature of the Hungarian property market.
Budapest
Hi Budapest.
Took your assessment on board in June and went to see apartment in Gozsdu-court(Madach Gardens). Spent a few days there. Really liked the city (apart from the taxi drivers!! they make the Parisian drivers look tame!!) Really liked the layout of the development and felt the apartment was in good location. Have decided to buy and am in the process at the minute. I'm in it for the long haul so hope it pays off!!
Thanks again for your much valued, practical advice.
Took your assessment on board in June and went to see apartment in Gozsdu-court(Madach Gardens). Spent a few days there. Really liked the city (apart from the taxi drivers!! they make the Parisian drivers look tame!!) Really liked the layout of the development and felt the apartment was in good location. Have decided to buy and am in the process at the minute. I'm in it for the long haul so hope it pays off!!
Thanks again for your much valued, practical advice.
from Bloomberg (could not get the link in so I am not too sure if this presents a copyright issue)
hd: Budapest, August 3, 2006 (MTI-ECONEWS) - The Budapest
Property Market Index, a measure of supply and demand on the market
as well as market players' plans and expectations, slipped to -17.6
on a scale of +/-100 in the second quarter of 2006, market research
company GKI, which prepares the index together with AL Holding said
on Wednesday.
Although the index showed a slight deterioration compared to
the first quarter, the market improved compared to Q2 2005.
The survey of the sector shows property market investors'
expectations remained more or less the same in Q2 compared to Q1.
However, among the four main property segments -- office, trade and
warehouse space, and homes -- home builders showed the least
optimism. The home market sub-index measured about -50 in Q2 2006.
Among managers in the capital's property development companies,
16pc said supply exceeded demand on the home market to a large
degree, 81pc said there was moderate oversupply and just 3pc say the
market was balanced. However, many managers have a more optimistic
outlook for the coming twelve months, especially on the Buda side of
the capital.
About 80pc of managers said the government's recently announced
austerity measures would have a detrimental effect on the market in
2006, and 75pc said the measures would also hurt the market in 2007.
Market insiders expect 38,000 homes to be sold in the capital in
2006, well under their projection of 75,000 new homes given in GKI's
Q1 survey.
On the office market, property companies expect the vacancy rate
to rise as more buildings are completed and because of the planned
sale of many government buildings in the centre of the city.
Currently, about 19pc of 'A' category office space on the Pest side
of the capital stands empty, while the figure is 17pc for the Buda
side. The office space sub-index measured -17 for Q2 2006.
On the trade market, however, property companies expect demand
to exceed supply. They noted that 15pc of retail businesses shut
down and were replaced in the last twelve months, which augurs a
pickup in demand in the coming twelve months.
On the market for warehouse space, property company managers see
balance: the index measured -5 for Q2 2006.
hd: Budapest, August 3, 2006 (MTI-ECONEWS) - The Budapest
Property Market Index, a measure of supply and demand on the market
as well as market players' plans and expectations, slipped to -17.6
on a scale of +/-100 in the second quarter of 2006, market research
company GKI, which prepares the index together with AL Holding said
on Wednesday.
Although the index showed a slight deterioration compared to
the first quarter, the market improved compared to Q2 2005.
The survey of the sector shows property market investors'
expectations remained more or less the same in Q2 compared to Q1.
However, among the four main property segments -- office, trade and
warehouse space, and homes -- home builders showed the least
optimism. The home market sub-index measured about -50 in Q2 2006.
Among managers in the capital's property development companies,
16pc said supply exceeded demand on the home market to a large
degree, 81pc said there was moderate oversupply and just 3pc say the
market was balanced. However, many managers have a more optimistic
outlook for the coming twelve months, especially on the Buda side of
the capital.
About 80pc of managers said the government's recently announced
austerity measures would have a detrimental effect on the market in
2006, and 75pc said the measures would also hurt the market in 2007.
Market insiders expect 38,000 homes to be sold in the capital in
2006, well under their projection of 75,000 new homes given in GKI's
Q1 survey.
On the office market, property companies expect the vacancy rate
to rise as more buildings are completed and because of the planned
sale of many government buildings in the centre of the city.
Currently, about 19pc of 'A' category office space on the Pest side
of the capital stands empty, while the figure is 17pc for the Buda
side. The office space sub-index measured -17 for Q2 2006.
On the trade market, however, property companies expect demand
to exceed supply. They noted that 15pc of retail businesses shut
down and were replaced in the last twelve months, which augurs a
pickup in demand in the coming twelve months.
On the market for warehouse space, property company managers see
balance: the index measured -5 for Q2 2006.
bearishbull
Registered User
- Messages
- 207
People investing in foreign property forget that many up and coming hot spots dont have undersupply issues like dublin/ireland had over last decade and that even if economy grows substantially prices are unlikely to grow at any where near the irish rates,sure look at a really rich european countries like france, germany belgium and sweden where property can be bought for far less than ireland despite many decades and even centuries of economic growth.