Budapest Real Estate Market.
“The city still has a price advantage over some of its neighboring capitals…”
— Financial Times
+140% yield on a 10 years investment period
Budaliget Villas are not only a unique housing opportunity but also a great option for investors who are looking for higher than average return on their invested capital.
At a 14% yearly yield, Budaliget Villas offer a great real estate investment opportunity for the low-risk, long-term profile investor.
Our investment specialists have created an extensive market and return on investment analysis to validate the numbers of these pages. Read further or contact us for more details on this opportunity.
Real estate market overview
Budapest is a rapidly developing vibrant and cosmopolitan city, rich in culture, rich in amenities and services. As the city develops, the number of wealthy people who choose Budapest as their home location increases, be it native Hungarians or expats from around the world.
In one of the largest expat surveys worldwide, Intonations looked for the most appropriate place for expatriates, where Hungary takes the 21st position among countries, which is a strong position considering that it overtook countries such as the UK, at 33th place, and the USA, at 26th place.
While real estate constructions in Budapest started to catch up with the demand of the middle class, currently there are no viable luxurious villa housing opportunities that the riches got used to in the Western countries.
Budaliget Villas is a gap filling addition to the Hungarian real estate market; therefore the potential return on the investment is remarkably higher than other real estate investment classes.
Regional market overview
Budapest has competitive prices and great room for growth as real estate prices are still cheaper than the prices in the neighborhood capitals and tourist destinations.
As Budapest real estate pricing lags on the regional level, it is expected to meet its expectations over time, making real estate investment in Budapest a very good opportunity.
Based on the following research and study, one can see that the real estate prices in major cities and capitals of the region are still 15-165% more expensive than Budapest.
Real estate price trend of Budapest
Following the 2008 financial crisis, the real estate prices started to surge in Hungary. The market was lagging a bit compared to other countries, but the climb has started to accelerate in 2016.
Currently the prices are at a yearly 15-20% surge, and specialists expect this trend to continue, especially in case of luxurious developments where the offerings are very sparse.
Hungarian Housing Price Index Change In Percentage
(Source: tradingeconomics.com)
Rental price trend of District II
When considering real estate as investment one should account not only the capital gain but also the revenue generating ability of the property.
District II is a good investment for longer term rentals, as it is a frequent destination for wealthy families due to the close proximity to the best schools and being one of the most popular residential areas.
Based on surveys at Engel & Völkers or Barnes International, we can state that there is no market offering for luxury rentals at all. We can only find a few lower quality villas due to the fact that the available or higher quality villas are bought or rented immediately.
The chart shows the rental price index change of District II. over the past years. By observing the trend one can see that in the past 10 years the rental prices have surged on average almost 4% every year and during economic hardship the rental prices spiked remarkably higher.
Rental Price Index Change In Percentage - District II of Budapest
(Source: ingatlannet.hu)
Investment opportunity -
The competitive advantage is 45-50% over competition
The Budaliget Villas gated community is nestled at one of the most prestigious locations where wealthy expat- and Hungarian families are looking for a place to live.
Some of the reasons for this popularity is the close proximity to the best international education, the nature, the clean air, the amenities and the generally newly built modern suburban neighborhood.
If not District II, then one might also consider District XII for finding a luxurious family home; however that area is slightly older with more outdated buildings.
Our market specialists have created a research that represents a collection of similarly sized buildings on similarly sized plots that are claimed as luxury in these two locations of Budapest. If one wants to understand the true value proposition of the Budaliget Villas community, then it is important to take a look at the current offering of the market.
Upon checking the listings of the luxurious real estate agents such as Engel & Völkers or Barnes International one could notice that the current market offering is very few and even the ones available are not really matching the quality, style and comfort of what a sophisticated westerner would seek for in Budapest.
Sales process & value proposition for investors
We are providing for smart buyers a special investor pre-release sales phase, where they can get hold of the villas at a remarkable amount of 30% advantage over the market price of the finished villas.
This sales phase starts once the building permits are acquired but before the final execution planning is completed.