According to CBRE’s ‘CEE Market Outlook’ 2016 is set to be a firm year on the back of an extraordinary 2015 which saw records broken in almost every real estate sector. Growth will be a key topic in the region in 2016 as economic recovery happens at a quicker pace than in Western European countries.
Dominant factors impacting the property market:
- low oil and commodity priceslow interest rates
- falling unemployment
- rising house prices
- rise in consumer spending
Budapest on the investors’ list
This rise in private consumption has given rise to new developments, such as retail schemes and logistic warehouses driven by ecommerce. Apart from traditional destinations (Prague and regional Poland), Budapest should be on the investors’ list, giving a significant boost to retail investment in 2016. The report also highlights Hungary, as a country that has flown under the radar for the past 12 – 18 months. A GDP growth was 2.9% in 2015.
On macro-economic terms, Hungary’s economy is supported by:
- cheap energy
- low interest rates
- relatively low exposure to the slowdown in China
Impacts from a property market perspective:
- strong household consumption will impact retail markets
- buoyant automotive production benefits industrial properties
- the development of ICT services will further dominate the Budapest office sphere, where office demand was up 51% within a year
- the overall cautious development market helps capital values to improve further
- rental outlook remains positive for owners (already tenant turnovers have increased in some cases by double digit figures)
Helped by a strong occupational market and more affordable financing, yield levels can compress further from their current high levels, narrowing the gap against other core Central European markets.
(Source: http://realista.hu/news/details/130451)
