MNB Flags Risk of Oversupply on Commercial Property Market
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The National Bank of Hungary (MNB) flagged the risk of oversupply in the commercial property market within one or two years in a report published on its website this week.
The central bank and financial market regulator noted that the vacancy rate in the local office market had risen to 12.6% amid reduced demand and handovers of new property, while low take-up raised the vacancy rate in the industrial and logistics property market to 8.6%.
The MNB augured a 6.4% increase in the stock of office space and a 13% rise in industrial and logistics property in the coming two years. Those factors point to a risk of oversupply within one year in the office space market, and within two years in the industrial and logistics property market, the MNB said.
The report shows lenders have not tightened conditions further for project credit, but demand for such loans has declined. The resilience of the local banking system is "strong" and its capitalization "sufficient" to manage risks, it said.
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