|
|
|
|
|
|
|
| |
  
|
April 30. 2010. Current Situation and Outlook of the Real Estate Market
(based on the survey of April 2010)
GKI Economic Research Co. has been conducting quarterly surveys since spring 2000 to assess the plans, intentions and prospects of businesses, real estate developers, realtors and households in the real estate market. This research project is supported by the trade magazine Ingatlan és Befektetés (Real Estate and Investment). The Budapest Real Estate Market Index of GKI synthesizes the expected outlook for the individual market segments (including the residential, office space, retail space and warehouse markets), and provides an overall view of the entire real estate sector. In particular, the index reflects the relationship between supply and demand as well as the future plans and expectations of market actors.
GKI Budapest Real Estate Market Index, 2002-2010
In April 2010 the GKI Budapest Real Estate Market Index was -32.2, which means significant deterioration compared to previous quarter. In the background of this the profoundly decreasing index of office space market can be identified. The index is above the historical bottom (experienced in July 2009) by 2 points. The stakeholders expect no positive turn in either composite markets, they have to face hard deterioration on the office space market.
Office space market
In 2009 a record volume of capacity entered the Budapest office space market and the development rate has not drastically dropped in the first quarter of this year either. GKI data shows that the Budapest office occupancy rates gradually decreased over the previous eighteen months.
Occupancy rates on the Budapest office space market
| Type A (%) | Type B (%) |
|---|
| Pest | 75 (75) | 75 (76) |
| Buda | 73 (73) | 74 (75) |
The results of the previous (January 2010) survey are shown in parentheses.
Budapest office space market index, 2004-2010
In Eastern Hungary, office occupancy rates have deteriorated since the previous quarter - the indicator of that area went down from 67% in April to 63% by July. The situation is better in Western Hungary: the indicator showing utilisation was 73% in April after 71% in January.
Realtors' assessments of the market situation significantly deteriorated in Budapest, but improved in Eastern and Western Hungary in the course of the previous four quarters.
In the next 12 months a material worsening in Western Hungary, improving in Budapest and a persisting strong oversupply in Eastern Hungary.
Retail space market
Retail space market index in Budapest, 2004-2010
In 2009 the total domestic retail space increased by 0.3 per cent, compared to 2008.
Responding realtor's assessment of the retail space market has been improving in the countryside - and it has not changed in the capital.
According to realtors during the next year an unchanged situation can be expected in all regions of the country.
Markets of warehouses
Warehouse market index in Budapest, 2004-2010
Realtors questioned by GKI reported a deteriorating assessment on a country average. While in Eastern Hungary an unchanged situation was experienced and in Western Hungary the market situation has been slightly improving.
On the basis of the received replies, a somewhat improving situation can be expected in the next 12 months.
Residential market
Housing market index in Budapest, 2004-2010
Situation assessments concerning the housing market have slightly improved. In Eastern and Western Hungary the tendency is the same to the national average. In Budapest the oversupply grew for almost all housing types.
For the next 12 months, responding developers and realtors expect a basically unchanged market situation in Budapest and in the countryside as well.
The table below summarises the opinions of real estate companies regarding each market segment, and the expected developments in these segments.
Assessment of housing market segments and expectations for the next 12 months*
| Situation assessment | Expectation | Expected change |
|---|
| January 2010 | April 2010 | Change |
|---|
| Budapest |
| Condominiums other than prefabs |
| Green areas of Buda | -32 | -46 | down | -46 | - |
| Other Buda areas | -34 | -46 | down | -46 | - |
| Pest downtown | -50 | -56 | down | -46 | up |
| Green areas of Pest | -42 | -44 | - | -48 | - |
| Other Pest areas | -47 | -50 | - | -40 | up |
| Prefab units |
| Northern Pest | -50 | -47 | - | -48 | - |
| South Pest | -50 | -47 | - | -50 | - |
| Buda | -45 | -42 | - | -40 | - |
| Family houses |
| Pest | -32 | -40 | down | -42 | - |
| Buda | -29 | -44 | down | -34 | up |
| Eastern Hungary |
| Condominiums other than prefabs | -61 | -47 | up | -36 | up |
| Prefab units | -72 | -54 | up | -54 | - |
| Family houses | -58 | -50 | up | -46 | - |
| Western Hungary |
| Condominiums other than prefabs | -60 | -56 | - | -41 | up |
| Prefab units | -62 | -59 | down | -55 | - |
| Family homes | -66 | -47 | up | -42 | - |
*/ balance indicators: Weighted difference in the proportion of those indicating excess demand and oversupply; in a balanced market its value is 0, it is negative in oversupply and positive in excess demand situations.
According to the April 2010 survey data, household expectations for home building and purchase have slightly improved from the previous quarter. In April the proportion of households certain to purchase or build a home in the next year again decreased. But, the proportion of those not being this certain in their intentions increased. The outcome of this survey indicates the presence of some 11,000 definite home builder or buyer households during the next 12 months. A further 47,000 households plan such an investment during the next year but for the time being they are not certain in their deliberation.
The proportion of those certainly or probably intending to renovate or modernise a home shows a slight decrease compared to the previous survey. In April 2010 some 30,000 households will remodel/modernise their existing homes within the next year. 131,000 households have probable plans.
Households' plans to build, purchase or remodel homes
(4-quarter moving average values, thousand households)
| Quarter | Build or purchase a home | Remodel a home, add-ons |
|---|
| Certain | Likely | Certain | Likely |
|---|
| 2002. 01. | 28 | 101 | 147 | 487 |
| 2002. 02. | 39 | 114 | 159 | 523 |
| 2002. 03. | 51 | 123 | 158 | 518 |
| 2002. 04. | 56 | 132 | 172 | 517 |
| 2003. 01. | 58 | 141 | 174 | 503 |
| 2003. 02. | 59 | 140 | 159 | 474 |
| 2003. 03. | 57 | 134 | 152 | 451 |
| 2003. 04. | 54 | 127 | 139 | 430 |
| 2004. 01. | 61 | 103 | 134 | 392 |
| 2004. 02. | 59 | 94 | 120 | 359 |
| 2004. 03. | 55 | 84 | 125 | 355 |
| 2004. 04. | 51 | 79 | 117 | 339 |
| 2005. 01. | 52 | 97 | 123 | 380 |
| 2005. 02. | 50 | 98 | 119 | 402 |
| 2005. 03. | 53 | 99 | 125 | 396 |
| 2005. 04. | 52 | 109 | 123 | 407 |
| 2006. 01. | 49 | 108 | 122 | 413 |
| 2006. 02. | 55 | 116 | 138 | 414 |
| 2006. 03. | 51 | 130 | 116 | 422 |
| 2006. 04. | 53 | 128 | 118 | 413 |
| 2007. 01. | 50 | 122 | 112 | 391 |
| 2007. 02. | 39 | 128 | 97 | 371 |
| 2007. 03. | 36 | 111 | 95 | 344 |
| 2007. 04. | 32 | 100 | 84 | 317 |
| 2008. 01. | 27 | 96 | 71 | 296 |
| 2008. 02. | 26 | 78 | 59 | 247 |
| 2008. 03. | 30 | 83 | 51 | 233 |
| 2008. 04. | 26 | 74 | 45 | 207 |
| 2009. 01. | 27 | 60 | 37 | 164 |
| 2009. 02. | 25 | 46 | 32 | 153 |
| 2009. 03. | 22 | 32 | 37 | 144 |
| 2009. 04. | 22 | 32 | 33 | 147 |
| 2010. 01. | 17 | 34 | 32 | 139 |
| 2010. 02. | 11 | 47 | 30 | 131 |
Source: GKI household surveys
Prices
Expectations regarding prices of new real estate in the next 12 months
(Percentage changes compared with current prices)
| Budapest | Pest County | Western Hungary | Eastern Hungary | Country average |
|---|
| Residential unit | -1 (-2) | -1 (-1) | 0 (0) | 0 (0) | -0,5 (-1) |
| Office space | 0 (-1) | 0 (0) | -2 (-2) | 0 (0) | -1 (-1) |
| Retail space | 0 (0) | 0 (0) | -3 (0) | 0 (0) | -1 (0) |
| Warehouse | 0 (-4) | 0 (0) | 0 (-2) | -2 (0) | 0 (0) |
The results of the previous, January 2010 survey are shown in parentheses.
Expectations regarding prices of existing real estate in the next 12 months
(Percentage changes compared with current prices)
| Budapest | Pest County | Western Hungary | Eastern Hungary | Country average |
|---|
| Residential unit | -2 (-3) | -2 (-2) | -2,7 (-3,3) | -2,3 (-3) | -2,3 (-3) |
| Office space | -2 (-5) | -7 (-3) | -5 (-1) | -2 (-7) | -3 (-5) |
| Retail space | -3 (-4) | -5 (0) | -7 (-2,5) | -5 (-3) | -5 (-3) |
| Warehouse | 0 (-5) | 0 (0) | -2 (-4) | -8 (0) | -2 (-3) |
| Construction lots | 1 (-6) | 0 (-2) | -1 (0) | -4 (0) | -1 (-2) |
The results of the previous, January 2010 survey are shown in parentheses.
Expected changes in unit (sqm) price for existing properties in the next 12 months
(Percentage changes compared with current prices)
| Condominiums other than prefabs | |
| Green area of Buda | 0 (0) |
| Other Buda areas | 0 (0) |
| Pest downtown | -2 (-4) |
| Green areas of Pest | -2 (-2) |
| Other Pest areas | -2 (-3) |
| Prefab units - Northern-Pest | -4 (-8) |
| Prefab units - South Pest | -4 (-8) |
| Prefab units - Buda | -2 (-4) |
| Family houses - Pest | -2 (0) |
| Family houses - Buda | 0 (0) |
| Budapest total | -2 (-3) |
| Eastern Hungary | -2,3 (-3) |
| Condominiums other than prefabs | -2 (-2) |
| Prefab units | -3 (-5) |
| Family houses | -2 (-2) |
| Western Hungary | -2,7 (-3,3) |
| Condominiums other than prefabs | -3 (-3) |
| Prefab units | -3 (-5) |
| Family houses | -2 (-2) |
The results of the previous, January 2010, survey are shown in parentheses.
Archive |
|
|
>