The sales of the following residential building at Corvin Promenade starts with 261 apartments
The Hungarian housing market is shining: due to the low bank interest rates, investors have turned to property, and the government decisions and the spread of Airbnb and similar services further intensify the increase in demand. The value of the apartments at Corvin Promenade doubled during ten years, and everyone who purchased an apartment here also enjoyed a continuous and serious rent yield in addition to the increase in value. Overall, those purchasing apartments at Corvin Promenade were able to realize an annual 18% gross yield projected to the purchase price of their apartment over 10 years. The sales of the 261 apartments in Phase I of Corvin Atrium, the newest residential building of the development, will start soon –Cordia, the project developer has announced. The company’s experts predict: real estate prices in the centre of Budapest will be increasingly approaching the Western European real estate prices.
Budapest, 23 March 2016 – The return on short and medium-term deposits vastly popular in Hungary decreased to the minimum because a decreased key national rate. At the same time, investments offering excellent yields with higher risk have almost disappeared from the market – among other things, because of the broker scandals. Furthermore, due to the floating prime rate nearing zero both property development and mortgage rates decreased significantly and the growth of real wages also continued in parallel with this. Costs decrease on the supply side, while financial options expand on the demand side: this combination has created the basis for the housing boom in Budapest, which can be experienced today.
Government decisions also help the housing market
Several economic stimulus measures by the government sparked significant market reactions: the reduction of the VAT on the newly built properties to 5% – Cordia drew the attention to the effect of this invigorating the construction industry and housing trade already five years ago – exercises a positive impact on the property development and construction sectors. In addition, the government’s new housing support, the CSOK ensures more freedom and a stable background for the families to effectuate their so far postponed purchases. In aggregate, this foreshadows the purchase of newly built apartments for investment purposes in the coming years.
„When I am asked about property investments, nowadays I often bring an example, that in times of crises, bonds, shares, bank notes have already been lying in the street, but this was not typical of apartment keys. We all know that property is a proven form of investment. It is not only that it is tangible, it also produces yield in several manners: by means of increasing the value and utilising, letting the property. It is not surprising that those looking for safety and reasonable yield return to the form of investments, which can be considered classical’” – said Mr Tibor Földi CEO of Cordia, Hungary’s leading residential property developer
The real estate investment was shed new light on by the so-called ‘short stay’ letting, a novel form of exploitation, which – thanks to the on-line platforms such as Airbnb – brought huge surplus revenues for those recognising the market opportunity.
Why property? Why Cordia?
Cordia has always aimed at developing properties of stable value: Cordia has always built high-quality, custom-made homes at popular locations with good potentiality, also focusing on developing public spaces and services, thereby increasing the value of entire neighbourhoods. The example of the most successful project in the portfolio, the apartments at Corvin Promenade, clearly shows that this business model is feasible, since high quality, unique properties at a good location produce an ideal yield. The complex regional development in progress on the 22-acre area during the past 10 years intends to architecturally, culturally and economically revitalize the prominent area called Józsefváros in the heart of Budapest. The development of infrastructure and service environment, the construction of restaurants, shopping and entertainment facilities, sports centres in the urban renewal project also prominent at the major European scale and receiving several professional and business recognitions, has almost been fully completed in recent years. As a result, people moving to, working in or frequenting the area to have fun are provided with all the facilities in addition to the excellent accessibility.
The development of Corvin Promenade and the sale of the apartments here continued without interruption even in the years of the crisis. One of the main reasons for this was that these apartments are definitely in demand in the tenancy market: they not only stand out from the rest of the downtown properties in terms of quality and amenities offered, but are also close to almost all major universities in Budapest.
The apartment as an investment product
The value of the apartments in Corvin Promenade voted as Europe’s best mixed-purpose property development project in 2010 has doubled while rents have increased steadily during the past 10 years. The aggregated annual yield from the rental yields and increase in value of the apartments at Corvin Promenade amounted to an average of 18% projected to the purchase price. „We commenced receiving registrations for phase I of Corvin Atrium, the newest residential building at Corvin Promenade, on 11 March, while sales starts in April. The market recognition of our properties is also confirmed by the fact that when the registration period began nearly 500 people indicated their intention to purchase the 261 apartments available. The wide range of sizes (27-141 m2), the unique architectural design (elevated entrance level, ground floor atrium design), and the smart home solutions will all be found in our newest residential building” – said Mr Tibor Földi about the latest development of Cordia.
Property investment with added value
The essence of the property management service available at Cordia is to take the property letting related burdens off the shoulders of the buyer. Upon request, Cordia’s specialists will furnish, let and operate the customer’s apartment, so yield production is economical and requires no additional time expenditure by the buyer. This complex package of services is unique on the Hungarian market.
In addition to the nearly 100 stores, a sports and wellness centre, a swimming pool, a post office, restaurants, cafes, and bank branches can also be found at Corvin Promenade, moreover, modern, green public spaces planned by a landscape architect make the area more liveable. The 1500 newly built apartments constructed here have all been sold.
How will the new apartment market develop? What are Cordia’s plans?
With the fewer and fewer empty inner-city plots, the supply of newly built apartments will be significantly reduced, which, according to several analysts, may result in the value of the inner-city apartments with favoured potentialities moving closer to Western European price levels in the long term. In the coming years it is expected that the floating prime rate, together with the deposit rates, will remain low, which sustains investor demand for properties with favoured potentialities. In response to these trends, in the spring of 2016 Cordia will also appear with a new building providing an excellent investment opportunity at another area in addition to the Corvin Promenade.