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Hike in real estate prices threatens economy

Overpriced real estate assets and large personal debts increase risks and may lead to economical halt, a new report by Fitch Ratings opines, recalling similar events that took place in the US.

Mortgage loans represent a lower proportion in private loans in Hungary as in more developed Western markets. It is also lower compared to the GDP than in Western Europe. Increasing competition will make banks come out with products with higher risks, but there is no chance of establishing a secondary mortgage market in Hungary. The situation is different in most European countries. Real estates are also overpriced in the UK and Denmark, Germany and the Netherland on the other hand are the least likely to witness a similar real estate bubble. However, most experts are optimistic, and global trends are looking up. (Gazdasági Rádió)