Budapest: Dunapest development, price/sq. metre

Hi there,
Does anyone have an opinion on the current value of Dunapest apartments. Bought a new 78 sq. metre, 5th floor, two bed, corner, 80% street/20% river view, standard developer type fit out, at the end of 2004. Averaging the price per square metre for 3 apartments for sale in Dunapest via various agents and discounting that by 30% gets me average sq. m. valuation of E2,200. In the opinion of more experienced Budapest investors is this anyway close to realistically achieveable?

Thanks for your help. This will inform a decision to sell or hold, any comment on capital appreciation potential for the next five years would be useful.

Best,

PWR

Re: Dunapest development, price/sq. metre

TThat price does seem possible in the current market. Apartments with river views are much more popular in this complex. I'd imagine that you've done okay so far in terms of capital appreciation also.

Nobody knows what's going to happen in terms of future capital appreciation. Have a read through old posts on the Budapest market and you should get a clearer account of what the current situation is. In summary, until the austerity measures end next year, locals are paralysed and few are buying. The large numbers of smaller international investors stopped buying here in 2005 and for the most part, the residential property market is stagnant. However, paradoxically, certain niches are performing very well and cash buyers are plentiful in very specific corners of the market.

The much lower price of Budapest properties compared to neighbouring CEE capitals bodes well for future potential for increase. Wages are also increasing significantly as the years go on, but nothing can be taken for granted at the moment. The EUR is likely to be adopted around 2013, at which point, cheaper banking practices and hugely improved mortgage offerings should theoretically help the property market.

On the plus side, rentability continues to be stronger than neighbouring capitals and the number of tenants looking for luxury apartments is increasing all the time.

Re: Dunapest development, price/sq. metre

PWR-

Did you rent out the apartment over the past few years. I'd be interested to hear how you got on.

I own a 1 bed on the 6th Floor, rented out at €500 per month and am thinking of selling next year (if I can ?) however if the current markets it could take a very long time.

The prices with the selling agents are interesting, however I doubt they are a true reflection of the market.

Regards,

Brian

Re: Dunapest development, price/sq. metre

Got 600/month, but after tax at source and management co. that netts out to 350 or so, not very interesting! Also we had quite a few void months between tenants. Was that your experience also?

PWR

Re: Dunapest development, price/sq. metre

600 euro a month sounds a little low for a 78sqm two bedroom apartment in this complex and, as you say, much too low to make it a profitable investment. In my experience, rents have been creeping upwards over the last few years. Did you furnish it to a luxury standard?

Re: Dunapest development, price/sq. metre

Hi PWR,

In fairness I think the rent u are gettin is low.I was getting €650/ month for a 66m2 apt facing the street on 2nd floor in block B.
We were probably using the same management company therefore u should be gettin close to €750-800 /month.

Re: Dunapest development, price/sq. metre

Sorry all,
Mistake in my original post, its 68 sq. m., not 78. But it still sounds like rent is a little lower than it should be.

I will get a valuation done and PM anyone who wants it.

PWR

Re: Dunapest development, price/sq. metre

It's still a two bed apartment in this complex though and should be let for in excess of 600 euro per month. Make sure to take a personal interest in how it's furnished/accessorised and presented for potential tenants.

Re: Dunapest development, price/sq. metre

Hi guys,bought two apts off plan 3 yrs ago in district 9 with intention of selling,but believe market is quiet,so hope to rent when compleated in december 08.Anybody know how much it costs to snag an apartment,also information on costs of getting a mortgage, fees etc,and good letting agents,any help would be appreciated.

Re: Dunapest development, price/sq. metre

PWR,

I would be interested in the valuation.