|
|
 |
|
Viewing report
|
|
|
|
Hungary Real Estate Report Q3 2011
Business Monitor International, June 2011, Pages: 69
The Hungary Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Hungary's Real Estate industry.
Following an awful few years, 2011 promises some good news for Hungary, both economically and politically. Government measures to resurrect the economy are starting to work, and consumer demand is picking up, even if only by a tiny amount so far. The country still has a way to go. Unemployment is high, albeit in part due to governmental changes in legislation designed to improve the situation in the near term. Attempts to meet the IMF’s call for austerity are being met by the Hungarian population with resignation but with understanding as the new government is settling in to do its job.
Demand has started to recover in the office sector, although mostly in renewals. New inventory volume in Budapest was so low by the end of 2010 that Colliers reported that demand may even have outstripped supply. This is particularly good news as there is substantial oversupply of space in Hungary. Jones Lang LaSalle reports that take up of office space in Budapest in Q410 was much stronger than new supply – 121,000m2 taken but just in two new buildings, totalling 4,000m2. In-country sources put the vacancy rate for this type of property at about 20%.
Developers in the country’s real estate market are struggling with a difficult business environment. There is some developer activity, but it is limited in scope. In April 2011 SCD reported in MTI news that it had completed five-year-long preparations for the area around Lake Balaton in 2010, but that it will not start work until lending conditions improve.
Some of the key opportunities currently in the real estate market are:
- The current lack of projects under development will mean that in two to three years’ time, should the country continue its recovery, there could well be a shortfall of real estate. Colliers suggests that it is ‘large, test, equity-risk investors’, mostly from outside Hungary, who are in a position to launch projects. These same investors may well be the source of new space after current local projects are delivered.
- The government is keen to make the country more marketable to the rest of Europe, and this is likely to see the real estate market supported and encouraged, although it may need to wait for more general stability first.
- The economic environment has hit small, independent retailers hard. Jones Lang LaSalle highlights that this has opened up retail units to international brands in top-category shopping centres where availability had previously been limited.
Some key risks to the current real estate market are:
- Crises taxes have dissuaded some developers from building in Hungary. MTI reported in February 2011 that TriGranit has chosen to build its latest huge project elsewhere because, as TriGranit’s Sandor Demjan says, ‘the kind of favourable tax and other regulations [that] are needed... are now missing’.
- The economic recovery is in its infancy, and there are many aspects that could yet fail. Not least, the political environment in Hungary has been turbulent of late and could become so again.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
