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Flat prices are dropping?

Even though the real estate market stagnates in downtown Budapest and it is on the rise almost everywhere, there is a section where Central Home expects a price drop.

The Airbnb craziness that exploded at the end of 2014 affected the flats that were for rent in the downtown area. A whole new group of demanders showed up. Most articlest wrote about the trend and how it affected most hotels and resorts, but we tackled the issue focusing on the downtown Budapest market.

source: index.hu – based on Airdna.co

The news of Airbnb drew a demand for ground floor apartments. The reason being that a 1st floor apartment cost way more, but the rent was basically the same as a street level flat would get. Using this a new wave of investors came mainly to the V., VI., VII., IX., XIII., and XIV. districts looking for cheap, near the centrum properties that they could hire out for ordinary rent. Due to this the prices of ground floor flats grew faster than any other real estate’s (according to Central Home database and observations). Also interesting is that the people who could no longer afford the street level flats downtown all moved out to the panels, causing a price growth there.

Between the summer of 2016 and the beginning of 2017 a few sources said that Airbnb is over. The more accurate assumption would be that the shock is over, Airbnb stagnates and has integrated into the real estate market. Central Home measurements imply that the groud floor apartment prices are starting to go back down, because the inverstors who wanted to invest in Airbnb already did it, so the old customer group is back (who can only afford the original price category). This process continues on to the panels, and when their prices drop as well we get back to the original market values, with Airbnb now being part of it (the real estate market) all.

 

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