Budapest

The top 20 places to invest in Europe

Data courtesy of Global Property Guide

20. Paris, France
Good: Low rental costs, high yields in Paris, Global political powerhouse
Bad: pro-tenant rental market, moderate-to-high transaction costs

19. Helsinki, Finland
Good: low to moderate transaction costs, strong economy, moderate yields, tenant-neutral rental market
Bad: high rental income tax.

18. Prague, Czech Republic
Good: pro-landlord rental market. Moderate yields, low transaction costs
Bad: moderate to high rental income tax. Aliens can’t buy land directly

17. Sophia, Bulgaria
Good: pro-landlord rental market
Bad: yields not great, high transaction costs, moderate rental income tax, corruption and crime problems

16. Brussels, Belgium
Good: strong rental demand
Bad: moderate to high transaction costs, tiresome tenancy length limits, moderate to high taxes

15. Vienna, Austria
Good: stable political system, moderate transaction costs, moderate yields for new units
Bad: complicated pro-tenant system, moderate to high rental income taxes

14. Ljubljana, Slovenia
Good: Pro-landlord rental market, low transaction costs, strong post-transition economy
Bad: low to moderate yields in Ljublana, high rental income tax, minor issues with ownership

13. Bratislava, Slovakia
Good: Low to moderate rental income tax, very low transaction costs, tenant-neutral rental market
Bad: minor issues with property rights, low rental yields.

12 Bucharest, Romania
Good: low transaction costs, strong post-transition economy
Bad: low to moderate rental yields, high rental income tax, strong pro-tenant sentiments

11. Warsaw, Poland
Good: low transaction costs, strong post-transition economy
Bad: low to moderate rental yields, high rental income tax, strong pro-tenant sentiments

10. Chisinau, Moldova
Good: High yields, pro-landlord rental market
Bad: secessionist problems, high tax rates, purchases must be in cash, one of poorest economies in Europe

9. Riga, Latvia
Good: pro-landlord rental market, low effective rental income tax rates, low transaction costs, high GDP growth, recent correction in housing market has restored value
Bad: low to moderate yields, minor ownership restrictions on land

8. Rome, Italy
Good: Europe’s historical centre, strong tourist rental market
Bad: strongly pro-tenant laws, high round-trip transaction costs, high income taxes

7. Berlin, Germany
Good: low to moderate transaction costs, largest economy in Europe, high yields in Berlin
Bad: pro-tenant rental market, moderate rental income tax

6. Talinn, Estonia
Good: very low transaction costs, moderate yields in Tallinn, strong economic growth
Bad: high rental income tax, slightly pro-tenant market

5. Zagreb, Croatia
Good: Strong tourist rental market, moderate taxes
Bad: multiple foreign ownership limits, moderate to high transaction costs, vulnerable and unstable economy

4. Istanbul, Turkey
Good: Moderate costs, moderate to high yields, rapid economic growth, low-to moderate transaction costs
Bad: pro-tenant rental market, moderate to high income taxes

3. Amsterdam, Netherlands
Good: moderate yields in Amsterdam, strong economy, moderate transaction costs, moderate rental income taxes
Bad: pro-tenant rental market

2. Skopje, Macedonia
Good: high yields, pro-landlord rental market, low transaction costs, moderate income taxes
Bad: serious ownership restrictions, political and security concerns

1. Budapest, Hungary
Good yields, low to moderate transaction costs, pro-landlord law
Bad: minor ownership restrictions, moderate to high rental income taxes

Legal

In conformity with EU regulations, Energy Performance of Buildings Directive (EPBD), the law in Hungary has been extended this year, requiring the presentation of a valid energy certificate (green card for a property) for apartments sold and rented after January 1, 2012.

Act 176/2008. (VI. 30.) on Certification of the Energy Performance of Buildings came into effect on January 1, 2009. The requirement for existing properties, apartments was optional until December 31, 2011. Now it has become mandatory.

Exemptions

The requirement does not apply in case of apartments where…

• The floor area is less than 50m2
• The property is in a listed heritage building and/or in an area under the administration of the National Monument Society and is classified as “protected”
• Usage is less than 4 months a year
• Premises serve a religious purpose
• The internal heat produced by technologies in construction exceeds 20 W/m2

The Certificate

The energy certificate tells us what the annual energy consumption of the property is in average weather conditions. In case the property does not meet requirements, a proposal is given to address the issues.

The energy performance of the property is ranked on an internationally recognized scale (from most energy efficient A+ to inadequate I, with C, meaning it meets requirements, and F, being average) for energy efficiency. There are hardly any buildings in Hungary over category C.

It is valid for 10 years.

Only certified and registered experts are allowed to issue the certificate, who are accountable to a national regulatory authority. They are listed on the web site of the Chamber of Hungarian Architects and Chamber of Hungarian Engineers. CE Invest works with reputable professionals and always attaches the credentials of the registered expert to the energy certificate upon issuance.

Common Practice

Since this is a new situation, there is considerable confusion on the market about it. It helps to look at things from a practical point of view:

Why is this important for apartment owners?

Tenants and Buyers are asking for it.

What potential buyers and tenants have picked up from the media buzz is that they have the right to demand this document, which may give them further grounds for negotiation. Therefore, even if in certain cases, it is not required legally, we strongly recommend performing the survey and issuing the certificate, because when people inquire about the apartment, they are looking for it. Inability to produce this document certainly weakens the owner’s position and makes other “properly documented” properties seem like they are more favorable.

It is our policy at CE Invest to issue the certificate for each apartment under our management, so we can see the actual energy status of the property on the one hand, and, on the other hand, compete on equal grounds in the market.

Conditions of Apartments

Many of the apartments in old buildings in Budapest will have a poor rating in terms of energy efficiency. This is due to inadequate insulation and outdated heating systems, improper management and irregular maintenance of the buildings. Some of the newly-built apartments, especially on top floors of buildings, may also hold surprises in terms of energy efficiency.

This should not discourage any apartment owner, for neighboring apartments will also have similarly poor ratings. In cases where the cost of an upgrade in the apartment is justified by a much higher rental or sales price, CE Invest will call your attention to it.

Now that there is a unified standard, tenants and buyers have better grounds for comparison and with rising energy costs, the better ratings will help sell or rent the property.

Service

The no-hassle service provided by CE Invest is swift and thorough.

It consists of two phases:

1)      Survey
Our engineer obtains all the necessary legal and technical documentation of the apartment and the building, liaising with the building management company and local municipality.
A thorough on-site survey is performed, where actual measurements are compared with existing documentation and blue prints.

2)      Analysis
The data thus collected is entered into a nationally accredited computer software to produce the current energy efficiency performance of the property.
The certified expert (energy assessor) verifies the data, then issues and signs (stamps) the certificate accordingly.

Cost

CE Invest charges a one-time 230 euros plus VAT for this service.

This includes EVERYTHING from start to finish:

1)      The collection of data for the survey

2)      All paperwork involved

3)      Liaison with the authorities and engineers

4)      The on-site survey itself

5)      All call-out costs, irrespective of how many times experts have to go out to the apartment

6)      Moving the process forward through all the stages until certificate is issued

7)      Expert fees

8)      Registration and proper filing of the certificate

This is a significant project in our company, which we are taking very seriously, with a number of people working on it. The main coordinator of the engineers, surveys, and processing is Magdi Ohegyi magdi@catherinedickens.com Phone +36 1 354 0912, Skype: ceinvest.magdi. Magdi has overseen several construction projects and knows how to protect owners’ interests. Feel free to give her a call in case you have any questions.

Sincerely,

Andras Patkai

Currency Opportunity

The mid-rate of the forint as published by the Hungarian National Bank (http://english.mnb.hu/) today is 309.48 HUF to 1 EUR. Last Friday it was 316. (1 GBP is 361.04 HUF and 1 USD currently stands at 231.91 HUF). For long years the exchange rate was around 270 to the euro. People in Hungary are just now starting to realize that the rate is not likely to get better, it is here to stay, or may even get worse. The weak forint is a hot topic in the media, along with hiked up fuel prices and the rest of the gloomy news about the European economy and the instability of the euro.

However, there is another side to the coin. From a Eurozone or Sterling (USD even more) perspective, the price of Hungarian property, goods, and services actually went down. Besides the general pressure on prices due to decreasing demand and increasing competition, there is a cumulative effect of the currency devaluation, which is especially favorable for most apartment owners. The idea is that your costs are denominated in forints while your rental income is in euros. This is why I recommend you fix your rent in euros where possible.

There is an exodus from neighboring Slovakia to Hungarian shopping malls, for example, prices have become so attractive. Hungarian repairmen, professional service providers are also in greater demand for businesses more connected with the euro economies.

For those wishing to sell their property this is not good news, unless you want to leave your income in Hungarian forints and not take it out of the country. Here is another opportunity for those reinvesting (to buy something more valuable), namely that the price of what you would buy also went down. The price of larger properties has seen a larger proportional decrease than smaller properties. While the formerly 380,000 euro flats went down to 230,000 euros, the formerly 100,000 euro flats only went down to 80,000 euros. Because of the cumulative effect mentioned above, owners of larger properties are often more motivated to sell, so there are great opportunities for those who can put together the capital.

For example here is an apartment which two years would have sold for for 100,000 EUR. The current price is 70,000 EUR. 1150 EUR/m2 including garage. Rental yield is 6.7-7%, depending on the exchange rate.

http://ceinvest.hu/2011/06/istvan-park-istvanmezei-ut-district-14-e81500-61m2-2-bed-1st-floor-apartment-with-balcony-and-garage/

Here I would like to take the opportunity to recommend getting rid of your old dysfunctional property which is not producing a profit. Especially apartments which have structural faults or impossible neighbors, are in a bad neighborhood, or there is some never-ending legal challenge. As long as you can trade it in for a much greater deal, in the long run you will be far better off. Now is the opportunity. If you sell below market value and “lose” 8000 euros, you will “gain” more than 8000 euros in the next purchase. It is worth a try. The key is to take advantage of the low prices and offer it really low as long as you can buy something else really low. My colleagues will assist you in pairing up properties on the market this way. Look for properties selling in HUF, not EUR. Just write to info@ceinvestgroup.com

Financing is available for private individuals at roughly 60-65% LTV and interest rates around 8-10% for HUF loans and 6-9% for EUR loans. Currently our experience shows that companies cannot get mortgage-based loans to purchase property in Hungary.

CHF and EUR Loan Repayment

Much of the Hungarian population has Swiss franc or euro based mortgage loans on their homes. At the time (5-10 years ago) these loans seemed to be the most favorable, their interest rates much lower than the Hungarian forint loans. There was no government regulation in place to guard against runaway currency exchange rates in the future, so businesses as well as households were exposed to this risk, effectively doubling monthly repayments in many cases.

The Hungarian government passed a very controversial law on September 19, 2011, which makes it possible to repay CHF loans at a fixed rate of 180 HUF to 1 CHF (current rate is 251.26). This only applies to clients who had an equal or lower rate of exchange when they received the loan and their loan contract was not terminated before June 30, 2011. No further interest, administrative costs, taxes or fees may be charged to client. In case of euro loans, the fixed repayment rate is 250 EUR. The law forced the banks to accept the exchange rate difference, causing outrage in the financial sector. Altogether about 66,000 people took advantage of the opportunity so far, until the end of October, causing a total of HUF 104 billion (EUR 340 million) loss to the banks. Originally the expected number of households was 150,000.

Fitch, along with S&P and Moody’s, recently downgraded Hungary as a result of this move. “… various fiscal policy measures and the scheme to allow the repayment of household foreign currency mortgages at below market exchange rates have dented foreign investor confidence, on which medium-term growth prospects depend,” said Matteo Napolitano, Director in Fitch’s Sovereign Group.

The deadline for the decision to repay the full outstanding capital is Dec 30, 2011, deadline for payment of the full amount is Feb 28, 2012.

This law also applies to foreign owners of property in Hungary. Have you considered taking advantage of this opportunity? Let us know if we can be of any assistance.

Of course the gain compared to the euro is not that great, however the implications of buying property from a motivated seller are enormous. A person who owes say 16 million HUF (52,000 EUR) to the bank can now suddenly repay 13 million HUF and walk off with the difference of 9700 EUR. Imagine the person who owes 50 million (160,000 EUR). Now they can get away with paying merely 40 million. The difference is 32,000 EUR. How much would they lower the price of their property in order to get rid of the increasing burden of the installments? We are expecting to see further radical price drops until the end of the year because of this phenomenon.

Sincerely,

Andras Patkai

MARINA PARTON a Danubius utca elején (öböl, Kelén utca) 1. emeleten, gyönyörű, luxus színvonalú, 2 szobás, teraszos, keleti fekvésű, csendes, világos, klímás, gépesített konyhás, bútorozottan vagy anélkül magánszemélytől kiadó hosszú távra megbízható bérlőnek, 2012. január 3-tól, teljes felszereléssel.
Teljes gépesített és felszerelt konyha, beépített bútorok, HD Tv, új bútorok, mosógép.
A ház házközponti fűtéses, liftes, portaszolgálattal, szép belső kerttel rendelkezik. Duna parti sétányok, futópálya, teniszpálya, játszótér emelik a lakópark hangulatát.
Költözhető 2012. január 3-tól. Alkalmas párnak, egyedülállónak.
Bérleti díja: 100.000 Ft/hó + 2 havi kaució.

A lakáshoz saját tulajdonú, nagyméretű teremgarázs beálló tartozik, ennek bérleti díja +20.000 Ft. A lakás garázzsal kiadó csak.

Fenntartási költségek/hó:
Közös költség: 12.000 Ft
Garázs közös költség: 3.500 Ft
Villany: 3500 Ft
Víz: 3500 Ft
Fűtés: 10.000 F

Apartment 43m2 + balcony 6m2,

Beautiful luxurious fully furnished, air conditioned 2 room apartment with balcony is now for rent. It is located in a tranquil, friendly surrounding.
The apartment is equipped with Hd TV, washing machine, and all the necessary household equipments.
There is central heating, elevator in the building, reception, and a beautiful inner garden.
Running track, tennis court and playground are creating an excellent
atmosphere.
It is suitable for couples and individuals as well
Underground garage is included in the rental price.
The apartment is available unfurnished as well.

general utility /month

Common cost : 12.000 huf
Garage common cost: 3500 huf
Electricity: 3500 huf
Water: 3500huf
Heating: 10.000

Description:
130 sqms flat on the 2nd floor of a new building
Fully furnished with brand new, demanding furniture
50 sqms open plan living room, dining area
Kitchen, fitted with modern appliances, fully integrated
3 bedrooms
2 bathrooms
Walk-in-wardrobe
6 sqms terrace (access from both bedrooms)
Overlooking the cortyard
Big flat screen television
Internet access
Stunning light-filled Japanese Garden
24 hours reception
120 sqms landscaped roof garden for the exclusive use of its occupiers with direct lift access
Secure underground car parking space and storage room
Lift
We provide full management services, cleaning, etc. during rental period
Air conditioning

A lakás 2 hálószobából, egy nappaliból, egy hallból, egy kisszobából, fürdőszobából (WC is), konyhából és kamrából, valamint gardróbszobából és egy második külön WC-ből, és előszobából áll. Tájolása: kelet, nyugat, világos a nap körbesüti. Mind a keleti, mind a nyugati oldalon, egy-egy erkély van. A keleti oldalon a belső udvar parkosított, füge- és fenyőfák díszítik.

A lakás eredeti állapot szerinti és gépészeti (villanyhálózat, víz-és csatornavezetékek) helyreállítása 2010-ben fejeződött be, azóta nem laktak benne. A belső nyílászárók eredetiek. Minden lakóhelyisége légkondicionált. A konyha és a fürdőszoba a legigényesebb egyedi bútorral és a legmodernebb, márkás gépekkel teljesen felszerelt. A ház 2006-ban homlokzati és gépészeti felújításon ment át, mind a nyomócsövek, mind a csatornavezetékek az egész házban újak, a lépcsőház is eredeti, elegáns állapotú. A ház viszonyai rendezettek, a közös képviselet mellett a ház állagmegőrzését és ápolását saját gondnok látja el.”

Ajánlat: eladásra kínált ingatlan

Teljes körűen felújított és bútorozott azonnal költözhető lakás.
Értéktartó, alacsony fenntartású lakás (havi össz fenntartási költség: 45.000 forint mely tartalmazza a fűtést is)
Kiváló környék, jó lakóközösségű, karbantartott ház
Nappali extra hangulatvilágítással (fénycsík+spotok szabályozható világítástechnikával)
Nappaliban kiépített dolby sorrund rendszer van beépítve
A nagyszoba és a nappali időkapcsolós elektromos redőnnyel rendelkezik
Az ingatlan teljes egészére kiterjedően értendő igényes burkolatok találhatók.
A Mammut bevásárló központok, a Millenáris Park, illetve villamos és a 2es Metro mindössze 1-2 perces sétatávolságra vannak.