The Budapest Property Market Index, a measure of supply and demand on the market as well as market players’ plans and expectations compiled by economic think tank GKI and professional journal Ingatlan es Befektetes, reached -23.3 points in October, an improvement of 8.5 points over July, but still 13 points under the level in before the crisis, GKI head Laszlo Akar said on Friday.
The sub-index for the warehouse market in the capital rose to -10 points in October from -25 points in July. The index was level with its rate in April 2008.
The sub-index for the home market improved by 10 points as the outlook for the coming twelve months improved, Mr Akar said. New home prices could rise 3.5pc in the capital this year, Mr Akar said. Prices in Pest County and Western Hungary are likely to stagnate, but could rise 1pc in Eastern Hungary, he added.
The price of resale homes in are expected to drop 2.2pc in Budapest, on average, under the 3pc drop expected for the country as a whole. Resale home prices in Pest County and Western Hungary are expected to fall 3pc and they are seen dropping 4pc in Eastern Hungary.
About 8,000 new homes are expected to be built in Budapest this year, but there are 2,000-3,000 new homes built earlier that are still unsold, explaining the drop in prices, said Ingatlan es Befektetes editor-in-chief Laszlo Borsi. Prices for family houses in Buda have stopped dropping, while prices in Buda’s greenbelt are down only about 1pc and prices of family houses in south Pest have fallen 2pc, he added.
The Budapest Property Market Index reached a historical low of -33.4 points in July 2009. The index peaked at -10 points in July 2008.