Hungary’s commercial real estate market poised for slow recovery, says central bank report

Hungary’s commercial real estate market may have “bottomed out” and could be ahead of a “slow turnaround”, the National Bank of Hungary (NBH) said in a report on the sector published Thursday.

Tamás Nagy, a director at the NBH, said disappointing GDP had weighed on the sector but accelerated, broad-based growth could mitigate cyclical and structural risks. He acknowledged higher vacancy rates on the office and industrial-logistics property market, boosted by handovers amid modest demand, but said the NBH saw little risk if the vacancy rate continued to climb in the mid-term.

He said a record volume of projects in the pipeline would lift industrial-logistics property stock significantly in the coming two and a half years. Commercial property market investment in Hungary fell in H1 2024, but yields stagnated, he added. Outlays of commercial property loans climbed in the first half, even though lending conditions did not ease, he said. Improving consumer confidence has improved vacancy rates at shopping centres in the capital and other cities around the country, he added.

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