Property
Vacation homes, residences and houses enrich The Lake - ReSource
It has long been established that anyone wishing to sell a Balaton vacation home is in for a rough trip. Buyers are almost non-existent, and those selling rarely lower their prices, creating a stubborn impasse on the real estate market. Billboards advertising lots and vacation homes proliferate, offering properties of all shapes and sizes to any interested. A sign of the times ‘round Balaton can be seen the road to Balatonalmádi, where eight or nine properties can be advertised within a few hundred meters.
Meanwhile, in the face of a nadir of interest, supply is ever-increasing among residences as well. Not only would owners like to sell their homes suitable for year-round occupation, but the industry continues to produce in surprising amounts. Investors have now gone beyond smaller projects consisting of a few apartments, and optimistic investors are developing buildings with several dozen residences. Real estate experts ascribe this flooding of the market to investors' hopes that price-conscious buyers can be wooed to residential apartments and the concomitant state assistance on mortgages. Indeed, state subsidies and lower interest rates on loans are inspiring many to seek year-round residences instead of vacation homes.
Developing residences, runs an alternate viewpoint, might also be attractive to a new class of buyer lured to the shores of “The Hungarian Sea": those who prefer to spend summer holidays or weekends on these shores but have no interest in maintaining a property. Seeing opportunities available to avoid these unwanted tasks, they might be more amenable to opening their purses if they are able to focus strictly on the pleasures of vacationing.
Regardless, a shocking 1200 apartments, the majority unsold, are under construction between Siófok and Balatonlelle, according to an AL Holding market study. More than three-quarters are for sale in Siófok, the south side's largest town, and most are tenant-ready. The bad news there is the 600 unoccupied. Despite the general disinterest, the newly built apartments remain inexplicably high; the average price per square meter in Siófok is approximately HUF 350,000, while HUF 400,000 is the going rate in Balatonfüred.
In Siófok, seven new buildings billed as located on the lakeshore are instead fenced off from free beaches. Here, 565 apartments stand empty; starting at HUF 300,000 per square meter, some are priced at nearly half a million forints. In Siófok's Aranypart area one hundred or so meters from the Balaton shore, four large buildings of ten to twenty apartments each are carrying 36 empty apartments total - thus far in vain. Three of the buildings have offered space since the beginning of 2005, with the fourth put on the market a year previously. The latter currently bears the burden of ten unclaimed apartments. And a telling example comes from a small complex in the heart of Siófok remains 81% unsold, with nine of its eleven living spaces unspoken for.
Balatonlelle has quite a few unoccupied spaces as well, though the situation there is not as hopeless as many lakeside settlements appear to be. At least one brand-new building boasts a nice 70% occupancy rate, with 30 of 43 apartments claimed; another edifice erected in 2005 has four apartments remaining for those interested.
Meanwhile, in Fonyód, not a single contract has been signed since January for any one of eight apartments in a building a scant 200 meters from the shore, despite the fact that the building is slated for a November completion date. The going price in this house is HUF 240,000 per square meter; though Siófok's prices far surpass this rate, the Fonyód construction's price tag has still proven to be too high.
The situation appears no rosier on The Lake's north side. In Balatonalmádi, a project completed last year has only managed to sell every third apartment. Figuring in an average wait of five months to close a deal, the project's ratio of 33% occupancy looks even worse.
Yet developers are not giving up on Balaton-side investment. In question is the ease their situations might gain should they seek opportunities in other areas of Hungary, since no segment is flooded with buyers. Additionally, those that have already begun projects cannot simply abandon them and must complete the work even if few to no buyers are anticipated. “This course of action is sensible for those who have not yet begun work but have already spent a substantial sum on land," explained Gusztáv Illy, AL Holding sales office manager. The firm is currently building 64 apartments near Hotel Azúr in Siófok, counting on the hotel's services.
Some optimism among realtors can be observed around the shores of Balaton: While patently undeniable that the area a buyer's market rules, changes can be seen. “Interest rose in the month of August, and not only information-seekers have been visiting real estate agencies, but also some seriously considering a real estate purchase," evaluated Csaba Sall, CEO of midiTOURIST Real Estate and Travel Agency in Badacsonytomaj. Important to consider is that vacation homes typically carry a minimum price of 20 million, whereas most buyers are interested to the tune of HUF 10-20 million. And, since houses with a view are favored, very few are willing to pay extra for the privilege of a waterfront location.
As prevails around the Balaton shores, the small Veszprém County town Badacsonytomaj will be graced with three residential parks of twelve apartments each. Developers plan to begin construction in the spring of 2006, with investment scheduled to proceed slowly. Investment will be allowed in one building at a time; construction on the second will begin if and/or when sales look encouraging. Phase III will begin once a handful of apartments from the second building have found owners.
