Long-term Rentals can Make a Comeback in Budapest
Annual returns of long term rentals have reached the rate of the vacation rentals in certain districts and streets of Budapest. There is a strong correlation between the vacation rental and the long term rental market through rental property investments. But important changes are yet to come.
2015 – Year of the Investors
Due to investments more and more apartments have entered the real estate market in the previous 1.5 year. The growing supply has consequently increased rental prices. Property investment purchases and vacation rentals boost were one of the main reasons of growing rental prices in Budapest. The average apartment rental price was 160.000 HUF per month in February 2015. It has grown up to 180. 000 HUF per month in popular parts of the downtown and around the boulevards.
Take a look at the changes of rental prices according to latest rental market reports by ingatlan.com:
Rental prices have risen here:
- in district 6, 7, 11, and 13 – the supply has flagged up measurably
- in district 13 rental prices have grown from 140.000 HUF up to 172.000 HUF (23%)
- in district 11 they have increased by 15% up to 150.000 HUF since last February
Price has fallen from 169.000-173.000 HUF to 150.000 HUF here:
- district 2
- district 3
- district 12
Long term rentals might take the lead
Recent rental market dynamics show that apartments suitable for vacation rentals for tourists in the downtown - with elevators, air-conditioning, upper levels overlooking the street – are being sold out. Property investors therefore are purchasing apartments for long term rentals.
Vacation rentals rented for a few days might be on a declining trend, it may also follow that long term rentals might take the lead, which might result in stabilization of the rental prices.
(Source: http://24.hu/fn/penzugy/2016/02/27/az-alberleti-arak-mar-utolertek-a-lakashoteleket/)
