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UPDATE - Budapest Property Market Index improves in July

The Budapest Property Market Index, a quarterly measure of supply and demand as well as market players' expectations, measured 102.8 points in July, 1.6 points higher than in April, GKI chief László Akar said on Tuesday.

The index was up 19 points from its bottom reached two years earlier, but was still 5 points under its pre-crisis reading.

The index is compiled quarterly by economic think-tank GKI and professional journal Ingatlan és Befektetés.

The increase is caused by the sub-indices for office, commercial and industrial property. The sub-index for home prices currently is as low as -60 points.

An index value at 100 points corresponds to the long-term market average.

Market players expect no change in the prices of new homes, in contrast to used homes, whose prices could fall a further 1-5%, said László Borsi, who heads Lakásvásár Media Csoport, the publisher of Ingatlan és Befektetés.

Out of every 1,000 households, 7 plan to buy or build a home, compared to 49 in early 2006. The number of households planning renovations fell to 23 from 122 in 2006.

Because of the limits on sales, Akar did not expect foreclosures to have a significant effect on the home market.