The market for short-term residential property rentals has collapsed; therefore investors are now trying to get rid of their properties. Nearly twenty portfolios have been put on the market of Budapest which contain hundreds of millions worth of homes for rent.
13 Aibnb apartments for sale in one building in the heart of the city. [...] It’s a property complex that has been continuously managed for the past two years. Most apartments have a view of the nearby park.
This comes from an advertisement on ingatlan.com, which is offering flats at Klauzál tér for a total of 690 million forints.
Nowadays, it’s easy to come across ads like this. It’s no coincidence that a lot of people want to quit this business now, as short-term property rentals are not a lucrative business any more. Firstly, the whole market has collapsed due to the pandemic, and secondly, there have been rumours in recent months about stricter legislation to be introduced.
The government has handed over the right to regulate the Airbnb business to the municipalities.
It is not yet clear what can be expected in Budapest, but many investors apparently do not even want to wait until the details emerge; they would rather get rid of their properties as soon as possible.
Presumably, some of the properties on the market now are mortgaged, and even though there is a payment moratorium until the end of the year, these mortgages will have to be paid after that, which is not easy in the middle of an economic crisis.
The ad quoted above is one of the more expensive ones, although there is one advertisement on the market offering 13 flats for more than 1.3 billion forints in district VIII; this price, however, also includes the owner's accommodation service business. Most of the properties offered in bulk range from 400 to 600 million forints. For this amount, you can usually get 10-14 apartments, typically located on the same floor of the building. An example to this is the following ad, in which the price is set at 450 million forints:
12 luxury apartments with Airbnb license are for sale in the party district. The properties are on the 2nd floor of an apartment block with a lift. They were made up of 3 flats, on a total of 360 square metres. Each apartment has a bathroom, toilet and kitchen. The apartments are luxuriously furnished and equipped. A separate laundry room and storage room belong to the apartments. The price includes all furniture and built-in appliances.
When Airbnb started back in 2008, the original idea was to make it easy for individuals to rent out their empty rooms or unused flats. Since then, however, an entire industry has been built up on this online platform.
Over the years, investors have emerged who bought and refurbished flats or blocks of flats in the centre, specifically because they later wanted to rent them out on Airbnb, especially for high-paying tourists. Sometimes they acquired complete blocks of flats, which functioned practically as a hotel.
The only difference was that they didn’t have to comply with as many rules as hotels, in terms of consumer protection, fire, and health and safety regulations. It is also worth adding that owners fail to pay tax on 25-30 percent of the apartments for rent on the Airbnb market, Balázs Schumicky, the president of the Association of Hungarian Apartment Owners told our news portal earlier.
It used to be an incredibly lucrative business. In the 12 months before March this year, Airbnb and its partners had generated a turnover of approximately 52 billion forints in the Hungarian capital.
Now that the Airbnb business has been struggling since the outbreak of the epidemic, there has been a spectacular growth in the number of flats on the property market in the capital. As a result, there is a good chance that house prices in Budapest will fall.