Hungarian real estate index reaches nine-year peak


GKI-MGYOSZ’s Hungarian real estate market indices were up in January by an average of nearly three points, as compared to the the previous quarter, reaching the highest level since Q3 2007, according to a quarterly report published today by economic institute GKI and the organization of employers and industrialists MGYOSZ, based on a survey of the industry.

Although the outlook for the sector as a whole is upbeat, some variations have been noted in the various markets including residential, office, retail and warehouse.

The recent home subsidy program CSOK launched by the government has impacted the residential market substantially. “The number of households definitely intending to buy or build homes increased by 41%, whereas the number of those households that were inclined to do the same went up by 18% compared to last October,” the report noted.

Of the respondents surveyed, those engaged in real estate activities anticipated that real estate market conditions in rural areas would improve dramatically in the next 12 months, while the Budapest market would likely stagnate compared to the previous quarter. Given the marked improvement in the Budapest real estate market, however, this stagnation is in no way seen as unfavorable. “In the current survey the Budapest index rose by five points and the national index by ten points,” according to GKI-MGYOSZ.

With reference to the land market for building, “optimism previously registered regarding Budapest can now be seen in rural areas as well, probably as a result of the announced housing policy measures,” the report noted.

In terms of the office market, the report revealed that occupancy rates in Budapest and surrounding areas have improved. “In the fourth quarter of 2015 the average rate in Budapest (82%) almost reached its eight-year peak.” Meanwhile occupancy rates in rural areas varied between 70%-72%, according to GKI-MGYOSZ. The Budapest office market index fell by three points in January 2016, whereas the national index dropped by almost eight points. “Expectations essentially returned to their level in the fourth quarter of 2014.”

The retail market indices saw some recovery in both Budapest and rural areas, up by six points, excluding eastern Hungary where stagnation was noted, the report said.

According to GKI-MGYOSZ, the national warehouse market index increased by three points over the previous survey, while the Budapest index rose by two points.

GKI-MGYOSZ conducts quarterly surveys to assess the plans, intentions and prospects of companies engaged in real estate activities such as developers, realtors, consultants and operators, as well as households in the real estate market. Respondents of this survey included 110 real estate firms and 1,147 companies, while the household sample comprised 1,000 people, representative of gender, age, residence and education level.

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