Manhattan prices expected in Hungary's luxury real estate market

Budapest, May 11 (MTI) - Demand for luxury real estate in Budapest is growing and market analysts expect prices in this bracket to level with Paris and New York in the near future, the daily Magyar Hirlap reported on Thursday.

There are at least seven housing construction projects underway in Budapest where the average sale price per square metre is projected to exceed 1 million forints (EUR 3,850), the paper said. An increasing number of Hungarian entrepreneurs and top managers are seeking luxury properties, although most of the demand is still from foreign investors, said the paper. The Irish company Gandon Holding is financing the construction of super-luxury apartments, Corvinus palace, under the Buda castle, and homes here are being advertised mainly in Ireland. Flats in new buildings erected in central Budapest are advertised almost exclusively abroad and they can also be bought pre-rented, with a paying tenant, said the paper. Many people are also moving back from the leafy suburbs to the centre, as downtown Budapest gets spruced up. Besides the construction of top-market real-estate, recent years saw a boom of home building investments in lower price categories, as well, and these involved a high number of irregularities.

Deputy chair of the national home and construction affairs office Sandor Fegyverneki told the economic daily Napi Gazdasag that the number of construction projects where investors had broken regulations was intolerably high. The authorities had to step in 25,000 cases last year and force investors to comply with regulations, Fegyverneki said. The builders were not interested either in stricter regulations because many investors disappeared after the authorities had imposed fines, he added. The situation is expected to improve as a result of a recent amendment in the law on construction, but it remains a problem that construction authorities are not independent from local councils and there are many uncertainties in the management of city development, the paper said.