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Budapest property market index slips in Q2

The Budapest Property Market Index, a measure of supply and demand on the market as well as market players' plans and expectations, slipped to -17.6 on a scale of +/-100 in the second quarter of 2006, market research company GKI, which prepares the index together with AL Holding, said on Wednesday.

Although the index showed a slight deterioration compared to the first quarter, the market improved compared to Q2 2005. The survey of the sector shows property market investors' expectations remained more or less the same in Q2 compared to Q1. However, among the four main property segments - office, trade and warehouse space, and homes - home builders showed the least optimism. The home market sub-index measured about -50 in Q2 2006. Among managers in the capital's property development companies, 16% said supply exceeded demand on the home market to a large degree, 81% said there was moderate oversupply and just 3% say the market was balanced. However, many managers have a more optimistic outlook for the coming twelve months, especially on the Buda side of the capital.