New government quarter drives up area property prices

A recent announcement by the Hungarian government that it would build a new administrative quarter behind Budapest's Nyugati (Western) railway station has led to a jump in area property prices, Index.hu reports, based on an article in business daily Napi Gazdaság. According to some market experts, sellers of properties in the vicinity have already raised their asking prices by 10-15% because of the initiative.

Interest in residential property in District XIII has been high for years, and supply has followed demand, with numerous housing projects still under development in the area. A square meter of living space costs Ft 280,000-Ft 300,000 (roughly €1,000-€1,200) even on the fringes of the district, while the average per-meter costs of residential units cost from Ft 330,000 to Ft 360,000. Loft apartments, which are gradually becoming fashionable, cost nearly Ft 500,000 per square meter. The properties on offer range from small condominiums to loft apartments to flats in mega-projects with several hundred apartments.

Many flats in buildings completed before the government's announcement are now being offered for up to 50% higher than the original asking prices, especially small ones near the city center, while those who invested in the earliest developments in the area are enjoying paper gains of more than 100%. However, only a fraction of this supply is actually on the market, said Ákos Murányi, senior analyst at real estate agency Duna House. Meanwhile, according to Murányi, sellers of flats near the new government quarter who have not raised their prices are proving increasingly unwilling to haggle.

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