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MNB: Commercial Property Market Requires Special Attention

Office Market

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Hungary's commercial property market requires special attention as higher energy, construction, and financing costs challenge both demand and supply sides, the National Bank of Hungary (MNB) said in a report published on its website.

The central bank and financial market regulator said circumstances on the market point to rising vacancy rates, falling investment, and higher yields, "trends that carry the risk of property devaluation." 

The vacancy rate in the Budapest office market stood at 9.9% at the end of June, and the rate rose to 6.4% in the industrial and logistics property market, the MNB noted. 

Although "not high in historical comparison," the rates indicate "an entirely different situation," it said. 

The report shows investment turnover in the local commercial property market reached EUR 600 million in the first half, falling 7% from the same period a year earlier. Three-quarters of that turnover was linked to domestic investors.

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