Budapest Property

treasure

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My brother bought an apartment on Andrassy Street (Budpest) three years ago and is wondering if he should sell now & invest elsewhere or wait to see if its value will increase? He paid €210,000 & renovated it for around €30,000 & is being offered €240,000 - so no profit but too many problems trying to communicate with the Hungarians. Also, maybe there are too many properties to let over there now? Has anyone some up to date info on the property, economic & political situation there at present? Thanks.
 
Statistics suggest that Budapest property increased in value every year until 2004, then dipped slightly in 2005. but between 2005-2006, it rose again. Otthon Centrum suggest by over 13% for classic apartments. Two other seemingly more independent reports suggest the figure to have been around 7-8%. However, the market is very segmented, with strong demand for good apartments but little or no demand for poor-quality apartments. In addition, exceptional apartments are often sold at a premium.

The political situation has stabilised since last year. Reforms are taking place and the budget deficit will more than likely decrease over the next 2-3 years, to allow for Euro adoption between 2011-2013.

The forint has regained all of its strength since last year's collapse and foreign direct investment continues to be high. However, inflation and interest rates are also high, so local spending power is restricted. The economy is unlikely to grow by very much during the next couple of years.

There are too many properties available for rent at the minute, but not enough of them are high-standard and priced realistically. Most people I know, who live here, would say that it's difficult to find nice apartments for rent in Budapest.

A lot depends on what your brother is looking for out of this investment. With the right property, yields can be high in Budapest, certainly higher than most of the rest of CEE. High capital appreciation is not predicted within the short term, but longer term projections tend to be much more favourable.
 
the price of the apartment depends also in it's size, once you know the price / m2 you can compare it to other offers (check the database of www.dh.hu, www.oc.hu, www.a1ingatlan.hu, www.casaro-hungary.com for similar properties) this will give you a hint about the price.
judging by the price of the apartment it should a high level also for rental, is it furnished? take into consideration that it is possible to rent it empty. however depending on where it is located along andrassy ut you might be able to let it as an office - without furniture.
most of the demands for the high end properties is in Buda side, almost all of the foreign families will rent there due to the fact that it is in proximity to international schools. it is more difficult to find a tenant that will pay good rent in pest side, if you are not able to let it as an office you might try to reduce the rent only in order to find a tenant
last but not least, andrassy IS "the location" in Budapest, although prices of re sale apartments in the city center were not stable in the last 2-3 years, for the long run it will be very difficult to go wrong with supreme location as andrassy.
good luck
 
I have a property on Andrassy also. Because of desperate problems with management companies I decided to sell 2 months ago. Have an offer of 240,000. (bought for 197,000 and renovated for 20,000). So a loss being made (taking into account stamp duty of 9,000 and a similar fee for the estate agent) but I will be glad to get my money back. In my opinion the services sector has a long way to go in Budapest.

I don't see that there is any appreciation in apartments in the three years since I bought - even in "the location" of Andrassy.
 
I don't see that there is any appreciation in apartments in the three years since I bought - even in "the location" of Andrassy.
But,
Have an offer of 240,000. (bought for 197,000 and renovated for 20,000)
The big disadvantage of buying and selling quickly is that a huge chunk of capital appreciation is eaten up by fees and transaction costs.
 
devoto you paid 217,000 and you can sell for 240,000 , more then 10% appreciation. real estate investment is not for short time, you can either try a different management company - bear in mind that most of them has service problem to some degree - or just close the apartment and keep it empty without having the need to pay any special costs...
 

I am in a similar position in so far as I have an apartment that is renting but can't find a rental agent to manage it without big problems. Would you still not have to pay house maintainence etc. even if the apartment is empty? C*s*ro is looking after mine at the moment - who would you recommend there to sort out a problem with the maths on a Client Account Page? I am not keen on paying for the same bills twice!!!