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Hungary: Still frozen real-estate market

The 2007 composite property index of Ecostat Ingatlan Barometer is 44.4%, 0.5 percentage point lower than in 2006, which foreshadows that the property market will be stagnating this year, again, said Lenke Pólya, research leader at the Ecostat – Government Institute for Strategic Research of Economy and Society.

Last year the dynamism of the construction and trade of flats slackened, in Q4 the index was 43.9%, 0.3 percentage point lower than a year before. However, at least the refurbishment market will boost in 2008, forecasts Ecostat, in accordance with the tendency in West Europe. Demands for new-built and other flats are likely to decrease, while the commercial building sector will continue to see a slight expansion. As to property investments in 2008, the municipalities are the most pessimistic, companies feel hesitant and households have cautious plans. Property investment companies prognosticate a slightly decreasing building aptitude, but a 1.6 percentage point increase in the total turnover. Households expect the price hike on the property market to exceed inflation. (Gazdasági Rádió)