After a first article dedicated to the characteristics of the luxury segment in Hungary, our Member from Eastern Europe makes us discover the profile of luxury buyers in Hungary. So… Who buys luxury properties in Hungary?
(…) the most outstanding factor in this category is that much more decisions are made out of subjective, emotional reasons compared to buying an average priced property
“There are several interesting differences between buyers who are seeking an average priced property and those looking in the luxury segment” said Zsolt Szathmáry, Otthon Centrum Franchise Partner working in inner district of Buda. The decision making criteria is much more complex.
Of course, location is still a key factor, but the panoramic views, quiet locations and exclusivity all weigh in much more into the decision. Yet the most outstanding factor in this category is that much more decisions are made out of subjective, emotional reasons compared to buying an average priced property. Buyers are looking for an expression of a way of life – they come with solid expectations and are not willing to make compromises.”
This kind of decision making process is illustrated by the fact that a luxury buyer can spend even 1 – 1.5 years thinking before buying. The number of available properties in the 300M HUF and up category is scarce, yet buyers are determined to shop around looking at as many properties as possible. “Buyers who would finance these purchases by taking out mortgages are almost non-existent”, added Kata Kühne, CEO of Otthon Centrum. “Demand is very low, so it is worthwhile to target foreign buyers as well. As members of an international organization, we were pleased to see that our foreign partners have shown serious interest in the premium segment of the Hungarian real estate market.”
While most of the luxury properties in the inner Buda districts are single family homes, on the Pest side this segment is mostly represented by apartments with prices over 100M – 150M HUF. “While with single family homes the sky is the limit, when it comes to apartments, the prices top off at 300M – 400M HUF” explained Boglárka Horváth, Unit Manager of Otthon Centrum’s 5th District Office. “The luxury segment is dominated by all cash buyers on the Pest side as well. In the case of a renovated apartment offered at over 100M HUF, it is not sufficient that the built-in materials are premium quality, the building in which the apartment is found also has to be flawless.”
“Our foreign partners from Prestige MLS are not only interested in the luxury category, but due to the suppressed prices, there is also a strong interest from investors for other properties in the top price ranges,” added Kata Kühne. “Almost all of Europe has seen a drop in prices starting in 2008, however in many countries this pattern ended sooner. The combined real estate price index for the member states of the EU started to show stagnation starting in 2010. The suppressed prices brought on the heightened interest of investors.”
