Budapest is a rising market, but it’s still full of bargains, says David Spittles
Budapest is a relatively safe property bet for the adventurous who fancy a home in one of central Europe’s fast-changing countries.
The Hungarian capital is not so much emerging as re-emerging. Its grand Hapsburg boulevards and palaces, elegant terrace cafés and sophisticated culture are an added bonus to its slower-paced, affordable lifestyle. Two centuries ago, the city was the epicentre of European civilisation. Wars and fascism put paid to that. Since joining the EU last year, however, Budapest has ambitions to again become the foremost world city of Mitteleuropa.
Sitting on the banks of the Danube, between Vienna and the Balkans, it is pulling in tourists and foreign investment, and modernising its bureaucracy. The property market has opened up, but the response has been more measured than in other former eastern bloc hot spots such as Prague. Residential prices have been rising by about 10 per cent a year since 2001.
Prices are roughly 30 per cent less than in London. You can buy a centrally located studio flat for about £35,000. For £100,000, you can buy a restored two-bedroom apartment with ornate period features. The average price is about £90 a square foot.
The city is awash with magnificent baroque buildings, many in need of refurbishment. But renovation is steadily happening. Like Paris, Budapest is split into numbered districts (23 in total) designated by Roman numerals. The Danube, which is never blue, divides Buda from Pest, and it is in Pest where the action is; the main business, shopping and residential areas. Bargains can be found in inner-city areas yet to be gentrified, mainly VII, the traditional Jewish quarter behind the Great Synagogue, and IX, a Soho-style neighbourhood, with restaurants and cafés. District VI has the impressive Andrassy Boulevard, Heroes’ Square and the trendy Oktogon and Liszt Ferenc squares. District VIII is a university area, with high demand for student accommodation. The more affluent riverside district XIII is fashionable and pricier. Development is also pushing into run-down dockside areas, according to A1 Real Estate, one of the city’s biggest agents. The company is selling The Mill, a 19th century listed grain warehouse in district IX that is being converted into 100 loft-style flats.
It is an off-plan buying opportunity. A1 Real Estate is trying to entice investment buyers with 15 per cent discounts for early reservations. Prices range from £68,000 to £475,000 with a typical mid-range flat (1,300 sq feet) costing £180,000. For more information, call 00 36 1 219 5505, or visit
Letterstone, a London-based property investment company, is selling flats in Szent István Park, an altogether different scheme. This is a new development of 283 homes in district XIV, on the fringe of Budapest’s centre and close to Varosliget Park, the largest green space in the city. Prices start at £40,000 for one-bedroom flats and rise more than £100,000 for two-bedroom penthouse apartments. Sl Properties, the Israeli developer, has already built a shopping centre next to the development and is targeting Budapest’s aspiring middle classes, who are keen to come out of Communist-era accommodation. Call Letterstone on 020 7384 7484.
Buy-to-let landlord Gary Silver, who lives in Bushey, Hertfordshire, is expanding into Budapest and has bought a two-bedroom flat at István Park for £70,000. „I believe I can get better returns on my money in Budapest than in London. There are risks when buying abroad, but the investment potential is promising. Ultimately, I’m taking a long-term view and wouldn’t use money I couldn’t afford to lose.”
There are no residency requirements for foreigners to buy on Hungary, though only one property can be owned in an individual’s own name. It is recommended that investors who are bulk buying set up a Hungarian-registered company.
Purchase costs, including solicitors’ and agents’ fees, are about four per cent. It is important that your lawyer ensures the seller is registered as the legal owner and that nobody else has the right of residence, a legal condition separate from ownership.
Flight time from London is a little more than two hours. EasyJet has flights from £41.