Market review and foreign capital inflow expected in 2017
Although impacted by the great recession in 2008, partly due to its massive external debts in the EU, which affected its bonds, currency and equity market, Hungary pulled thorough and came out of the crisis as quite a regional success story, especially when it comes to its real-estate market.
The local government took action that was considered unusual at the time, focusing on micro economic policies, lowering imports and reducing national debt of foreign currencies, which in long term helped Hungary in successfully recovering its economic market following the global crisis that started in the late 2007.
Starting late 2014, and throughout 2015-2016, Hungary has been seeing one of the highest growth rates in eastern and western Europe. Closely tied to Western European capitals, as Germany’s economy started to stabilize and show growth, Hungary followed. Benefiting from low local interest rates and relatively low food and oil prices, the inflation rate in Hungary was minimal, causing the central banks to cut interest rates further, thus supporting the consumers in the market.
What’s the forecast for the Hungarian real estate investment market in the future?
As we’re in the second half of 2017, we can see that the Hungarian stock market has had a positive period, which topped by a positive outlook for the economy by the rating agency Fitch, signaling investors that they can put their trust in the local economy. This, together with its superb positioning in the heart of Europe and increased safety when compared to other cities in central Europe, attracts additional amount of foreign capital inflow, strengthening the economy further, which also affects property prices.