Location: Where to Buy Investment Residential Property in Budapest
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The city of Budapest is divided by the Danube river into two cities: Buda and Pest. There are also 23 administrative districts in Budapest. The number of the district largely sets the property price.
The flat and busy Pest side is the location for the city’s financial, administrative, commercial and retail centers. The primary areas of interest for the residential property investor are the central 5th and 6th districts.
On the hilly and residential Buda side of the city, the prestigious residential areas of the Buda hills are becoming a favorite amongst longer-term investors, since expatriate families tend to rent long term in these pleasant, green neighborhoods, near international schools.
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Location is the key to any property investment decision!
The latest trend of Budapest investors hoping for higher capital appreciation:
Good quality residential property in the most wanted neighborhoods of the green, residential Buda hills, from 2 bedroom flats to luxury villas. These are the locations where the more fortunate Hungarians prefer to reside, as well as the expatriate community, with an even growing number of international schools.
Among expatriate families who tend to rent long term in Budapest, districts 12 and 2 are the most popular and also most expensive areas to live. They are scenic, and parts of them look like you are in the country. But there are other upcoming green and quiet, residential neighborhoods for less, where more and more international families decide to settle. Search in parts of district 11 (Sasad), and 22 (Budafok), and even a number of Buda suburbs, including Budaörs, Diósd, Törökbálint, Biatorbágy, Nagykovácsi, Budakeszi and Solymár. Check expatriate housing for ideas.
Buda side districts with investment potential
District XI (11) – The largest Buda district includes the more central Kelenföld, which houses two large universities, the Technical University and the ELTE University of Sciences with lots of their dorms; as well as famous Gellert-hegy and scenic Sasad-Sashegy (Eagle Hill).
A new subway-line called Metro 4 is under construction, which will have all of its 5 Buda-side stations in district 11, making the busy inner (Kelenföld) part of the district an even better investment spot and a more convenient place to live. The latest large shopping mall, Allee just opened in the heart of district 11, at one of the future stations of Metro 4.
The Sashegy and Sasad areas are quite nice family neighborhoods, though they are more convenient with a car, similarly to most nice places of Buda. I live in this area, and my teen-age offsprings used to get around quite well on public transportation (numerous bus-
lines and tram 59). International schools are also close proximity.
District XII (12) – Buda hillside: the most prestigious and exclusive residential districts of Budapest, the home of the President and Prime Minister among other political luminaries. Nice, green, upper-class and expensive, being the most desirable location
for the better-to-do Hungarians as well as expatriate families and international schools.
District XXII (22) Budafok – Up-and-coming district with a lot of green. If you want to live in the green own a car, this is probably the most comfortable and definitely the most inexpensive Buda district within Budapest city limits. A great advantage for English speaking families with kids: the nearness of ICSB (International Christian School of Budapest), and the large and fun Campona mall.
Pest-side districts with investment potential:
If you are not very familiar with the city, stick to central districts (particularly 5 and 6) and as close to main thoroughfares as possible, e.g. Andrássy út or the Körút. I wouldn’t really recommend new apartments for the most part. They tend to be overpriced, and rather low in quality.
For the purchase-refurbish-sell deal, the quickly developing districts
7, 9 and 13 are also recommended.
The 5th, 6th, 7th, 9th districts (in Pest), and 11th (in Buda) are where the universities are located with many foreign students who are looking for apartments to rent, especially along the metro lines. It is not enough, however, to go by districts, as the prestige of smaller neighborhoods greatly varies.
The most desirable part of the city for singles (students and businessmen) is the central district 5, followed by the rapidly developing western areas of District 6, which has undergone something of a renaissance in recent years, especially the streets near Andrássy út. Other areas with good investment potential include the central end of District 7 as well as parts of the rejuvenated District 9, particularly around Ráday Street, and district 13, between the Danube river and West-End City Center.
District V (5) (and parts of VI) are the most likely areas for higher capital appreciation in the smaller investment category, especially near the Basilica in District 5 – Hercegprímás utca, Sas utca, Oktober 6 utca as well as all streets near the Parliament.
This is the most desirable city-center location and is quiet and pretty as well as close to businesses as well as everything else. With some luck you can still get great renovated one bed apartments on the best streets in District 5 for just over € 100,000
District VI (6) boasts the famous Andrássy Boulevard, Heroes’ Square, the trendy Oktogon and Liszt Ferenc Squares with their cafes and restaurants, a favorite area among foreign tenants. The smaller, quieter streets near Andrassy (such as Szív, Szinyei Merse, Munkácsy) are pleasant places to live. An achievable rent of 300-350 for a furnished 1 bed in these and similar streets is a realistic expectation. I would definitely furnish as you will find it hard to rent otherwise. 90% of people who rent in the city center are non-Hungarians, with no furniture of their own.
District VII (7), the traditional Jewish Quarter behind the Great Synagogue, has seen tremendous investment recently, with buildings renovated rapidly and parks cleaned up beautifully.
Dohány utca – Akácfa utca location is good, close to everything, but by no means considered a prestigious area. Rental prospects will probably be quite good. Price seems okay to highish. Renovated 80 m² second hand apartments would more than likely rent for € 450 / month. Students won’t be able to afford the rents if they are to be around the 6% mark. (The average salary in Hungary is around € 500-600 / month). The surrounding area is okay. It’s not that close really to Blaha Lujza tér, which is not a nice place to be yet. However, the city is trying to re-develop this square and also, a new luxury hotel (New York Palota) opened recently right beside it.
The Madách tér area near Deák tér is an extremely central location with lots of businesses close, and should be rentable. It became a lot prettier lately than it was before.
District VIII (8) – I wouldn’t really recommend investing in most of 8 although there are a few fairly good parts. But the worst parts of central Pest are also located here and sold to unaware foreigners (areas in or around Alföldi Street, Kun Street beside Erkel Színház Theatre, Fiumei út, Rákóczi tér, Orczi tér).
It would be more difficult to rent out apartments here than in the other districts of central Pest. Despite being quite close to the center, district 8 is not a desirable area. People believe crime is higher here and it was traditionally the center of prostitution in the city.
You don’t actually experience that much of it any longer, but if you were to ask any Hungarian where the worst part of the center was, 90% would agree with me. Many of the new buildings in this area also seem to be aimed at foreigners, who may not be aware of local opinions.
Closer to Kálvin tér is a lot better, such as part of Baross utca, but even still, there is nothing so amazing about that area either.
District IX (9) – Trendy bars and cafés are springing up on Ráday utca and in the section bounded by the Nagykörút, attracting university students and young professionals.
Refurbished older parts close to the Körút, such as Ráday utca, are good, but new builds further out tend to be ugly and overpriced. The government spent a lot to improve the area but be careful to spend your money on a new apartment here. You will very probably have problems renting it out, and when it comes time to sell, you may also run into difficulty. For the price of a poor quality new apartment here, you can get a second hand apartment in district 6, beside the Opera and just off Andrássy út, right in the center of town.
If you have made up your mind to buy a new apartment anyway, the part of district 9 close to the Danube is likely to be a fine investment. The new National Theatre is located close by as well as more centrally located Ráday utca, which is one of the best streets over here for restaurants, cafes and bars with ambiance and culture. Some of the popular Summer bars are also within walking distance.
Tenants will probably prefer apartments with overlooking inner garden. The design looks fairly good compared to other new builds in the city.
District XIII (13) – A well to do location with some history and many antique shops, directly serviced by a metro line. Its best location is Szent István Park and Újpesti Rakpart between Szent István Park and Margit híd (Margarete bridge).
Other Posts about Buying Real Estate in Hungary:
- Location: Where to Live with a Family in Budapest
- Location: Where to Buy Investment Residential Property in Budapest
- Rental Yields in Budapest
- Expenses When Purchasing
- Buying for the Right Price
Krisztina Palhegyi a certfied Realtor, has been a Home Search Specialist (Buyer Agent) in Budapest for over 13 years. If you are looking to rent or buy a home in the Budapest or the Buda suburbs, then you are in the right place.>
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