What real estate price changes can be expected this year? How does the current economic situation affect the expat real estate market? What can owners and tenants expect?
Rents in the inner part of Buda have been stagnant for a long time in terms of the expat market, but the same can be said for properties in downtown Pest. However, the price freeze of recent years seems to be changing, the increase has already started due to inflation, but other factors also cause further changes. Going against the trends so far, get ready for a stronger rent increase.
Processes behind the price increase
Square meter prices have risen in Budapest, so the cost price for the owners is getting higher and higher. Tension arose due to the increase in purchase prices and the difficulty of renting properties. It is worthwhile for companies to notice the changing guide prices and increase the budget if they want to provide their colleagues with a quality home.
Rising utility prices due to the energy crisis have made green investments particularly attractive. The utilities for newly built properties are small, but they can be rented more expensively. The aforementioned increase can already be observed in the area of newly built sublet registers. Currently, there are not as many newly built housing options in Budapest as the demand. However, expats prefer such sublets.
As a result of the limited new construction market, expats are equally interested in used properties. But it is especially important for them that the properties are renovated and modernized. The price of a property may even decrease in the next period in the absence of energetic, technical and aesthetic improvements. Out-of-date apartments are basically cheaper, but the amount saved on the rental fee will include higher utilities. So the price goes up for the tenants, but the owners don't make any money on it either.
It is worth keeping up with the latest energy requirements, as it makes the property more popular and sustainable. It is an investment for the owners to make their apartment even more attractive to expats.
There are more and more Asian, especially Korean expats in Hungary, who contribute to the growth of the premium housing market. In the long term, the capital-intensive Asian demand will also have an impact on the entire market, because they will push up prices.
Hungary's unipolar real estate market structure is changing. For a long time, only Budapest existed in the field of view of large corporate apartment seekers. With the regional rise of ever-expanding large companies, the number of expats in these areas has also increased thanks to the developments in Győr and Debrecen. So real estate prices are also on the rise. Foreign language schools have also appeared, such as the International School of Debrecen (ISD). So expats with families are no longer forced to commute from Budapest.
More and more companies are coming to Hungary, developments are continuing. Renting is now a particularly good business in these cities as well. And the presence of expats has a price-stimulating effect on the entire real estate market.
Overall, rising costs will be inevitable this year. But with appropriate modernization expenditure, overhead costs can be reduced, which also benefits the owners. Because their investment pays off, and the tenants can live in higher quality properties.