Luxury Apartments Finding Owners FastJuly 10th, 2017
Nearly 10 percent of apartments for rent in Budapest belong to the category of apartments on offer for more than 4000 Forints per square meters. These homes can be rented monthly for an average 400.000 Forints, and yet, they find residents within 1-3 months.
The market for rental apartments have began a grow in the past few years following the changes in the housing market. Due to this, it is impossible to rent an apartment from the average net salary of 200 thousand Forints, that would leave the individual with some extra cash; yet, tenth of the rentals on offer advertises for 4000 Forints per square meters.
Despite the high prices, these properties find a tenant within 1-3 months. The luxury apartments in Budapest are leased for an average monthly fee of 260-600 thousand Forints, but we can also find apartments for an 800 thousand Forints monthly fee. The typical size of these apartments are between 80-130 square meters, but we can also find apartments of 200- 300 square meters or greater.
According to the Sales Consultant at Catherine Dickens Properties, Dániel Holcsik, the average size of these apartments on the Pest side is at around 80 square meters or greater; while in the Buda side this number is closer to 120 square meters. He adds, that those seeking a rental in this price range, are usually looking for a more spacious apartment, rather than a compact, space-saving solution.
According to the leading analyst of Otthontérkép.hu, Nándor Mester, the prices of luxury rentals are more or less set. ”According to our calculations, the prices of large apartments with a roof terrace and penthouses increased well above the average until mid-2016, however the price increase was only 5-10 percent during the past year; which means that we expect a similar rate of increase during the next 1-2 years. The demand may remain strong, which will probably stabilize the prices. Decrease is unlikely.” The analyst also explained, that a certain number of luxury apartments for rent are appearing in housing complex offers, however the sale time of these is somewhate longer than it was a year ago. The lower and mid-range priced apartments find owners a lot sooner within a project.
They also expect the lowering in the number of luxury apartments on offer for rent within newly built investments, in comparison with the more renovated or converted apartments in the wider city centre, that are extremely comfortable and offer exceptional services, providing a better business opportunity for investors.
The majority of premium quality rentals can be found in the city centre, especially in the V. and VI. districts (45%), with a price of over 5 thousand Forints per square meter. These are followed by the II. and the I. districts, which are also popular destinations for wealthy buyers. Interestingly, the lowest number of these luxury homes can be found in the IX. district, their prices are still closer to the forementioned 5 thousand Forint/sqm level. The reason for this can be found in the newly built projects, targeting the well-to-do audience.
Dániel Holcsik also explained that the most popular areas for luxury apartments in Buda are the ones with panoramic views of Pest. While the Pest side’s fastest selling luxury rentals are in the inner parts of the V., XIII. and IX. districts, especially those that have an option for renting an apartment that includes a terrace.
The growing number of high-priced properties can also be explained with the appearance of new projects on the one hand; and on the other, with the general rise in apartment prices, as well as with the spread of short-term rentals. According to Holcsik, the expectations in quality are rising and the newly built luxury apartments are of better quality. The consultant added, that owners are proportionately spending more money on renovations, which in most cases, is later included in the price.
These statistics confirm that cliché, that it is still worth investing in apartments, especially if it has good qualities, and if the owner is willing to invest in directing the developing and furnishing toward a premium level.