property news

Published: 09-04-2008
REsource IngatlanInfó

From time to time, the question of ghost buildings pops up on the real estate market. Many seem to believe that there are several apartment buildings in Budapest where, due to the majority of foreign buyers, the whole apartment building stands empty. We investigated: Are there really ghost buildings in Budapest?

Sellers and developers we asked, anonymously or not, generally do not support the theory of a conglomerate of ghost buildings. Undoubtedly, there are some projects where the majority of apartments were not sold and some where most properties were sold but a large portion of them still stand empty. This is typically due to foreign buyers who purchased property for investment purposes and expect unrealistically high rent or investors who wish to realize profit only from the property’s appreciation and are not interested in cash flow generated by rent in the intervening year or two.

We, at REsource, know of two buildings downtown in which apartments were sold but are nonetheless echoing from emptiness. According to our market sources, two premium quality apartment buildings located on Lovag and Vadász utca were developed by an Irish company and the majority of the apartments were purchased by private investors from Ireland. The Irish investors purchased the apartments above the market price and threw the properties on the market with such unrealistically high rents that it is not at all surprising that balconies stand empty, mailboxes are unmarked, and curtains are drawn.

Ágnes Péter is managing director of One2one Property, a company which deals with foreigners’ real estate sales in projects where foreign investors purchased their properties at a realistic price and appeared on the rental market with realistic expectations. According to Péter, there are no overall problems with renting on the market and although there are some instances of less successful projects, in general, the rental market works well.

Thus, it is clear that, for foreigners, much depends on the sales agency, since a foreign investor probably knows the Hungarian market only superficially and will receive his picture of the Hungarian market and information concerning realistically achievable income from rent from their agency. Typically, sales agencies do not deal with rentals, since knowledge of international (demand) markets is crucial and, for the latter, knowledge of the Hungarian market is a necessary

back to the news

top of page