The Budapest real estate market offers a constantly changing environment and investors often have to consider where to invest. There are different opportunities in different areas of the city and it is important to consider whether the inner districts or the suburban areas will offer better returns in 2024. Based on analysis from Wandering Investor, this article looks at the pros and cons of both areas to help investors make an informed decision.
Inner Districts: the Heart of Budapest
The inner districts (districts V, VI, VII, VIII) are located in the heart of Budapest and are a major attraction from both a tourism and economic point of view. The following is an overview of why investing in the inner districts can be attractive:
- Cultural and Touristic Attraction: the inner districts are the cultural centres of Budapest, where most of the famous sights, restaurants and entertainment can be found. This tourist attraction is a major advantage for short-term rentals, as tourists tend to prefer these areas. According to an analysis by Wandering Investor, inner districts remain attractive to short-term renters, especially for premium quality, renovated apartments.
- Value appreciation potential: the potential for long-term value appreciation is also attractive for city centre properties. Although tightening Airbnb regulations may reduce somewhat the income from short-term rentals, demand for downtown properties remains high, particularly for renovated, high-quality housing.
- Regulatory Challenges: However, the inner districts also face several regulatory challenges affecting Airbnb and other short-term rental platforms. Local municipalities have introduced strict restrictions on the number of days per year that an apartment can be rented out. Therefore, inner districts tend to offer a secure return for long-term renters.
Suburbs: Growing Opportunities and Stability
Suburban districts, such as districts XI, XIV and XVIII, are becoming increasingly popular for long-term rentals and purchases for families. Here’s why suburban areas are worth considering:
- More Affordable Price-Per-Value Ratio: one of the biggest advantages of suburban areas is more affordable property prices. Compared to inner city areas, suburban housing is generally cheaper, which provides investors with a more favourable price-to-value ratio. Wandering Investor’s analysis also shows that suburbs offer an attractive alternative for investors looking for stable income over the long term.
- Families’ and Long-Term Tenants’ Demand: Suburbs often offer a more relaxed, family-friendly environment, which is an attractive option for families and long-term tenants. In these areas, infrastructure such as schools, parks, and transportation links are becoming more developed, further increasing demand for properties.
- Development Potential: Suburbs are undergoing ongoing development, making these areas even more attractive. New construction projects, green investments, and infrastructure improvements are increasing property values and providing stable growth for investors.
Which is the Better Investment Opportunity?
The preference between the inner districts and the suburbs depends largely on your investment objectives. If you are looking for a quick return on short-term rentals and can take advantage of the attractions of tourism, the inner districts offer better opportunities. However, if you want longer-term, stable growth with fewer regulatory restrictions and more affordable properties, suburban areas may be the right choice.
According to an analysis by Wandering Investor, both areas offer exciting opportunities for investors, but the decision depends on whether you are looking for short-term returns or long-term stability and appreciation.
Summary
Both the inner districts and the suburban areas of the Budapest real estate market offer a variety of opportunities in 2024. While the inner districts offer the prospect of short-term rentals supported by tourism and renovation of premium properties, the suburban areas offer long-term growth and stability at more affordable prices. Investors need to consider their objectives and make decisions based on the characteristics of the market.
For more details on the Budapest real estate market and expert advice on how to achieve your investment goals, follow the QFV website where we can help you develop the right investment strategy.
forrás: https://thewanderinginvestor.com
