Budapest Offices


Experts expect more foreign investors in Hungary

Feb 2nd, 2016

The Hungarian market is currently one of the most attractive ones in Europe and will continue to be in the next year – and one of the main reasons behind that is the relatively high yield.

Western European real estate markets are far ahead of the Hungarian market, the volume of investments there has already reached the pre-crisis levels. In the third quarter of 2015 there was a significant 25% increase in real estate investments on the European markets. In multiple countries like French, Belgium, Norway or Portugal the value of investments doubled from the quarter before. A great growth was experienced in Germany where according to data by CBRE the increase reached 65%.

Eastern European markets also strengthened with investments almost doubling in the Czech Republic between 2014 Q3 and 2015 Q3. The Hungarian market too experienced growth but the volume of it was far from that of the Western markets'.

The yield of prime real estate is decreasing steadily for the third year on the Western markets. For example on the office market yield has already dropped under the lowest levels in 2007 and doesn't reach 5% on the mature markets.

Currently the most attractive market in Hungary is the office market, where liquidity is the greatest and which was the most affected by the decrease of yield. In the following period investments will likely increase in volume and become more concentrated with foreign buyers becoming more and more active – in the last year it was primarily the purchases of domestic real estate funds that moved the market.

Experts say that Hungary is currently very attractive to foreign investors because of the relatively high yields – compared to Western markets – and economic growth, and it seems that another period of convergence is coming next for the country.




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