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OPP.Today article titled
 

“Why Budapest property is set to outpace other European capitals”

 

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   According to the RICS Q3 2015 Global Commercial Property Monitor City Report, Budapest is among the top three global cities for expected capital value rises over the next year. Almost half (47%) of industry professionals surveyed say Budapest commercial property is currently priced under fair value.
In the next few years, the Budapest property market will strengthen further and gain increasing attention from international investors.”- Sándor Habóczky, Schoenherr Hetényi Attorneys at Law
 

     Eastern European property investors have a number of options when buying in major cities. Poland is a popular choice, with demand centred on Warsaw, but an up-and-coming competitor is Hungary and its capital, Budapest.

According to the RICS Q3 2015 Global Commercial Property Monitor City Report, Budapest is among the top three global cities for expected capital value rises over the next year. Almost half (47%) of industry professionals surveyed say Budapest commercial property is currently priced under fair value.

“In Budapest, “investors appear to agree with this perception, with enquiries from both domestic and international buyers rising at a rapid rate across all sectors of the market,” says the report.

Sándor Habóczky, Partner at leading international lawyers Schoenherr Hetényi Attorneys at Law, tells OPP.Today that in the next few years, the Budapest property market will strengthen further and gain increasing attention from international investors.

“We expect it will take one to two years until Hungary’s international reputation and the overall investors’ trust, as well as country ratings are restored and settled.

“Already now the macro-economic fundaments are fine, but investors still careful, as they still remember the country’s fragile position in the financial crisis era, also that the crisis effects were handled by unconventional governmental intervention to a great extent. Nevertheless, the economy is stabilized and growing; it is only a question of time for the investors to realise.”

Most foreign investors are from inside the European Union, but there is growing attention from further afield. “Private individuals from the EU invest in residential property purchases in Budapest. EU and CEE developers are invest in new projects in the retail and office sector. We have recently seen investments in existing office and retail assets by US funds and investment companies. We have also seen investors from the Middle East to invest in prime Budapest hotel acquisitions.”

However, Budapest does have competition from leading cities in neighbouring countries, says Mr Habóczky. “Hungary is only on the rise. Poland is much stronger and bigger market simply on the basis of the size of economy and population, as well as because they have ‘secondary’ but still quite big cities to invest and develop in, while Hungary’s investment market is totally focused on Budapest, as the country is absolutely centralized.

“As opposed to Poland, the Czech Republic seems to be a true competitor with comparable sizes and opportunities. Budapest competitiveness rather comes from the current pricing level (significantly lower than that of the Warsaw and Prague markets) and from the fact that the country’s economy is quickly recovering and the simultaneously growing business need for quality office spaces is also increasing. It is not anymore a tenants’ market.”

 

Read more at OPP.Today

 

 

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