ringledman
Registered User
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Are Budapest Developers still ripping foreigners off?
Here you can see a post on Digg about BIF, a Budapest Developer.
Budapesti Ingatlan Hasznositasi es Fejlesztesi Nyrt. Reports Earnings Results for the First Half of 2007
08/29/2007
Budapesti Ingatlan Hasznositasi es Fejlesztesi Nyrt. reported earnings results for the first half of 2007. For the period, the company reported net profit of HUF 800 million, turning around a loss of HUF 49 million in the base period, helped by the completion of a large riverside real estate project. The significant improvement was due to the completion of the flats in the Castrum Haz property built by the company. This helped revenues rise 258% year on year (y/y) to HUF 3.04 billion, including HUF 1.9 billion from the sale of the flats. Operating profit increased almost fivefold to HUF 988 million. This was supplemented by a HUF 33 million financial profit, compared to a HUF 232 million loss in the base period.
Source: Businessweek
This summer a German friend requested the price for a classical apartment near Andrassy. When I asked a local friend a few days later to call for the same property, the price was 4,5M HUF less (+/- 10%).
Finally, it's not really a rip-off if foreigners are willing to pay more than a local would.
Part 1 http://www.youtube.com/watch?v=YMWpnjzIcWo
Part 2 http://www.youtube.com/watch?v=gtlZZTRKGDc
Finally, it's not really a rip-off if foreigners are willing to pay more than a local would.
In the central districts of Budapest and particularly with those properties aimed at foreign investors and marketed by the bigger international agents, the asking price can be higher than what a local would pay. Who is to say what the real value is though and whether a rip-off is taking place or not, if e.g. a Western investor is willing to pay a premium for a newly renovated apartment? Good apartments, which are renovated to a luxury standard are not easy to find in Bp and overseas investors/immigrants to the country sometimes pay over the odds to purchase something which fits all of their criteria and doesn't cause any of the usual headaches associated with renovation in a foreign country.
They need to get with the times and have a transparent market place otherwise foreign investors will move on elsewhere.
You're right, UrbanDev, that Belgians, Swiss, Dutch, etc. are, typically speaking, not interested in investing in the Budapest market.
This is an odd survey...
We are increasingly concerned about the lack of transparency in Hungary. A recent study by Freedom House indicated that only 10% of the procurement actions are free of improper manipulations. Ten percent! Relative to other countries in another study, Hungary's transparency problems are getting worse, not better. If the government does not address this persistent problem, foreign investment in Hungary will diminish and some industry will exit Hungary for other countries where corruption is not such an issue as here.
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