It’s a well known fact that the residential property market in Hungary is stagnating and even shrinking in terms of property prices in certain areas of the nation and that international investor confidence has fallen dramatically in this sector. Furthermore, traditional developers previously focused wholly on residential real estate such as InterEstate are now diversifying away from residential, and the mortgage market in Hungary has shrunk to half its size.
All this begs the question ‘is there money to be made from property in Hungary in 2007?’ Well, if an investor is hell bent on buying residential stock, then unless they can negotiate bulk buy discounts on unsold stock in recently completed buildings in the main employment and population centres and look to the long term for ROI the answer is probably ‘no’ – but if you turn away from residential and begin to look at the commercial property market prospects you’ll find there is some positive news for property investors in Hungary.
We recently posed the question ‘is property in Hungary a good investment’ and drew the conclusion that one should err on the side of caution across Hungary’s real estate sector in the short term at least – but it’s likely that we didn’t go far enough with our report because the latest and most overwhelming news from Hungary’s property market is very bleak indeed.
Hungary joined the EU back in 2004 and prior to its accession it was heralded as one of the most exciting emerging property markets in the new Europe because investment was being made into the improvement of the nation, international companies were considering relocating to Hungary and therefore broadening employment prospects and improving the economic standards and buying power of local citizens.
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