EUR 1.5 billion of investments expected to flow into the Hungarian real estate market in 2019
GDP growth within the region highest in Hungary
Over 30 percent of real estate market operators think of 2019 as more successful than 2018
Investor activity to strengthen on vendor side
Volume of commercial real estate low, giving headaches to investors
Based on its survey entitled Hungarian Investment Sentiment Survey for 2019, CBRE predicts this year to be at least as successful as last year was. Though investor volume appears to be conservative, mainly due to the shortage on the supply side, planned business activities will strengthen typically on the vendor side year-on-year.
Domestic and regional forecasts
CBRE conducts an annual survey containing questions about the situation of the sector and the outlook for 2019 addressed to operators of the domestic real estate market (real estate developers, funding banks, investors, funds) in Hungary as well. In addition to the entire region, GDP has grown expressly in Hungary, in parallel with which over 30 percent of respondents expect 2019 to be an even better business year than 2018. This year, investment capital of EUR 1.3 – 1.5 billion is predicted to arrive to Hungary, representing a minimum decrease year-on-year, and this trend prevails in the entire Central and Eastern European region as well.
“2019 will be a highly exciting year for us, and it will be up to market operators and the global politics affecting the sector as well, what we can make out of it, and how successfully we will be able to close the year. Hungarian results resonate well with the developments in the global and regional markets, and we need to pay close attention to the shortage of labour that afflicts the construction industry also, and demographic figures”, added Lóránt Kibédi-Varga, Managing Director of CBRE.
Largest operators for the real estate market worry about global economic crisis
Activities of a large part of global investors increased mainly on the selling side (by 2 percent) compared to 2018, while activities on the purchaser side remained reserved. In global terms, an easing can be experienced in the field of logistic facilities, the office market continues to gain strength, while the hotel and resort sector retains its stability compared to earlier years as regards commercial real estate types.
Low volume of real estate in the market
In addition to providing forecasts, respondents point out the challenges and concerns of the sector, the strongest of them being the low volume of real estate available in the market (39%), global, European (19%) and local politics (15%), while they are least concerned about an increase in interest rates (10%), the increasing volume of commercial real estate (10%) and a lower GDP (8%).
CBRE also asked the 60 most influential operators in the real estate market about the yields they predicted for 2019. There was agreement across the sector that the office market displayed a decrease of 3 basis points and premium category industrial real estate showed a decrease of 9 basis points as regards yield. At the same time, there is consensus in anticipating a slight (6 basis points) increase in yield for retail.