May 16th, 2011

Foreign buyers vanished from downtown Budapest property market

Foreign buyers have disappeared from the inner streets of Budapest, real estate agencies told Napi Gazdaság.

According to one agent, turnover on Ráday utca – the cafe and restaurant-dotted street in District IX – was largely driven by German, Irish and Italian buyers in 2005-2006, following developments in the neighborhood. At that time, prices were in the range of Ft 300,000-Ft 350,000 (€1,120- €1,300) per square meter. Prices now rarely go above Ft 300,000/sqm, and there are few Hungarian buyers and no foreigns buyers at all looking to purchase in this part of the city.

The situation is said to be similar on Zrínyi utca (District V) where prices were near Ft 500,000/sqm before the crisis and currently hover around Ft 400,000.

  • Canadian

    No suprise there, foreign buyers buying Budapest has always been more of a myth then a driving market force.

    As a general rule, people buy into rising markets and sell into decling markets.

    The downside currently is much greater risk then any upside potential, unless you are buying with longterm growth in mind. Even such, the fact that you need to buy property in all cash if you are a foreigner and low cap rate makes it a loser as an investment.

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