High-end parking craze in Budapest: Buyers shell out millions for premium garages

As real estate prices continue to rise, many are choosing to invest in property as a way to protect and grow their wealth. However, not everyone can afford to purchase full residential properties at current prices, prompting some to turn to garage investments as a more budget-friendly option. This trend is reflected in the market, with garage prices rising significantly. Pénzcentrum took a look at what kind of garages are available for as much as HUF 50-60 million (EUR 126.7 thousand-152 thousand), and even examined the most expensive listing, priced at an astounding HUF 229 million (EUR 580 thousand).

Parking space and garage prices on the rise

The rising number of cars on the road has naturally increased the demand for garages and parking spaces, but the supply hasn’t kept pace with demand. As a result, prices for both parking spaces and standalone garages have steadily climbed over the past few years. Last year alone, garage prices across the country increased by an average of 10%, Pénzcentrum reports.

In Budapest, the average price for a garage hit HUF 7.2 million (EUR 18.2 thousand) in September, marking an 11% year-on-year increase. The trend was not limited to the capital; similar price hikes were seen in other large cities across Hungary. Interestingly, unlike in most markets where an increase in supply usually leads to price stabilisation or a drop, the garage market has continued to defy this pattern.

Smaller investment, solid return

According to Otthon Centrum, the first quarter of this year saw a slight easing in garage prices in line with broader real estate trends, but garages remain an attractive investment, especially for those with smaller budgets who are unable to afford an entire home. Despite requiring a smaller initial investment, garages can still yield solid returns, sometimes comparable to residential properties.

The average sale price for garages nationwide has hovered around HUF 6.5 million (EUR 16.5 thousand) in recent months. The type of garage significantly affects the price; standalone garages tend to be more expensive than parking spaces in shared garages. Demand for garages is particularly strong in downtown Budapest, where the starting price for a parking space in a shared garage is around HUF 6 million (EUR 15.2 thousand), while more spacious or premium locations can cost up to HUF 8-9 million (EUR 20.2 thousand-22.8 thousand). Similar trends can be seen in regional cities, where prices typically range from HUF 5 to 6 million (EUR 12.7 thousand-15.2 thousand).

Experts from Otthon Centrum noted that while garages require a lower investment than residential properties, the income generated from renting them out is also lower. However, in some cases, the returns can be just as high, if not higher. For those unable to invest larger sums, garages represent a promising opportunity.

Data from OTP Otthon confirms that garage prices tend to follow the overall trends in the real estate market. According to Bohus Péter, PR manager at OTP Otthon, after a market dip in March 2024, garage prices began to climb again, exceeding an average of HUF 10 million (EUR 25.3 thousand) by July. He also highlighted that while garage rental prices are rising, they still lag behind residential rental rates.