The panel discussion on the real estate market at Portfolio Property Investment Forum saw a number of professionals expressing their opinions on mainly the topic of missing developments: they think new projects can start soon, but there are certain obstacles we have to overcome first.
Doron Dymschiz, owner of Duna House thinks there is a strong psychological factor in the equation. He said that in the years of the crisis it was the buyers who saw the future, but seller lived in the past and changed their prices accordingly. Now it is the opposite, and we could be at the beginning of a longer upward trend.
Áron Horváth of the ELTINGA Real Estate Market Research Center also thinks that the positive state of the market is going to last. According to data it was the market of used estates that first started to boost and this had a great effect on prices. Developments have not restarted yet, but there is a chance the current positive trend will soon jumpstart the construction market. Although Horváth thinks demand and supply could be much more restrained than in the pre-crisis period.
CEO of OTP Real Estate, Adány Tamás thinks that though demand is has been growing stronger on the market for the last one and a half year, this is not enough to incite new investments. Development is a complex issue and an investor will only enter the market if they think they can reach a certain amount of profit. The currently 27% VAT is an obstacle which shuts 85 percent of the country out of development, says Ádány.
The low number of new developments also came up when Tibor Földi, CEO of Cordia Hungary Ltd. spoke. He thinks we will only see a rise in numbers when the market will be able to support a price level when it really pays off for investors to start larger projects. The cost of real estate development has risen 20-30 since 2007, but prices have not adjusted accordingly. Földi thinks the only good solution to this would be to decrease VAT.
Ernő Takács of the Real Estate Developers' Roundtable (IFK) thinks a cut of VAT is imminent, and if the government decides to decrease it by 22 percent that will have a significant effect on real estate prices as well.
Gábor Hegedüs, head of the project financing department at FHB Bank represented the side of investors during the discussion and he told the audience that the attitude toward home development is basically positive and more than 800 homes are currently being built in Budapest that are financed by FHB loans. He thinks the will and the projects are all there to increase this number further.
(Source: http://www.portfolio.hu/ingatlan/lakas/messze_meg_a_lakasarak_novekedesenek_vege.4.223032.html)
