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Budapest Property Market Index falls further

The Budapest Property Market Index, a measure of supply and demand on the market as well as market players' plans and expectations compiled by economic think tank GKI and professional journal Ingatlan es Befektetés, fell to -32.2 points in April from -29.2 points in January, GKI head László Akar said on Friday.

The index was up from a historical low of -33.4 points in July 2009. The index peaked at -10 points in July 2008.

The office market index worsened, but indices for other market segments stagnated, Akar said.

The office market index fell to -30 points in April from -23 in January. Vacancy at top-category office buildings was unchanged at 25% on the Pest side of the capital and 27% on the Buda side.

The retail space market stagnated in the capital, but improved in other cities around the country.

The market for warehouses was also flat.

The home index for Budapest worsened slightly, but it improved elsewhere in the country. Oversupply is biggest in the centre of the city on the Pest side, the survey shows.

About 20,000 homes will be built in the capital this year, Akar said. Home prices are seen dropping 1%, half the fall predicted three months earlier. New home prices outside of Budapest are expected to remain unchanged.

Prices are seen falling 2.3% for resale homes in the coming year. The drop is likely to reach 2% in the capital, but more in other cities and towns.

The index based on a survey of 1,000 households asked whether they planned to build or buy a home in the coming three months stood at 11 points, well under the 59-point peak in 2004. (MTI-Econews)