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Budapest – Remarkable boost in the real estate market

After seventy years, the Hungarian capital has the most expensive property price per square meter – increasing the significance of panoramic roof spaces and loft apartments – reported by Otthon Centrum real estate agency. Thanks to the Construction Act Amendment realised in March loft conversions have been simplified in the capital; as a result of which, a remarkable boost could be experienced in Budapest’s real estate market.

Residential communities may also benefit from loft conversions, since renovation works – including the building’s mechanical system, staircase, and facade – are carried out and financed by a development partner. This way, several buildings will be renovated, which increases the value of the properties. Thanks to the opportunity of loft conversions, the city centre of Budapest has regained its historic prestige. It is the first time since the Second World War when properties in the downtown are sold at the highest price.

In this area, there is hardly any free space and only a very few convertible buildings or empty plots; as a result, property prices are skyrocketing in the city centre – 1 sqm costs more than EUR 3,000 (~HUF 1 million).  The popularity of newly built loft apartments could be explained not only by the location benefits of the city centre but also due to their breath-taking panorama.

According to the market experts, unit prices of these penthouse apartments can be 5% higher than in the case of newly built apartments. Regardless of the fact that these lofts are two or three times larger than the average. In the inner districts, the average size of newly built apartments is 45-60 sqm, while penthouses can reach 140-160 sqm, and this size is also correct for the terraces. In the 5th district, this year’s sales realised EUR 6,000 (~HUF 2-3 million) per square meter, while in the surrounding areas – 7th, 8th and 9th districts – the price of newly built homes started at EUR 2,710 (~HUF 910,000). Still, the average rate of loft apartments was 4-5% higher here as well.

The expert also emphasised that property purchase in the fourth, fifth or higher floors might hide some disadvantages as well. At the uppermost levels, several structural failures can be discovered. This is especially common if the property is not well maintained.

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