Is the Hungarian housing bubble unfolding?

All across the world, central bankers have been creating asset price bubbles because – wrongly – they have been disregarding asset prices and only been focusing on consumer inflation, something that I believe is also happening in the domestic property market. The best sign to/of it was brought to my attention by one of my colleagues: from the ten biggest hungarian domestic funds, the first, the third, the fifth, and the ninth are investing in property. Of course, it would be more evident (and also the peak of the bubble) if all ten (or at least eight) property fund were there, but it is not so bad either. I think that in Hungary, we have not reached the end of the property cycle yet because as long as there is economic growth/wage growth and an abundance of cheap money (as there is now, and as MNB (Hungarian National Bank) promised, there will be – and it is something we can believe), the party goes on. However, it is always good to keep a keen eye out for the signs (for example, five years ago, there were hardly any cranes in Budapest, and now you can find them everywhere) such as this investment fund ranking. The property market boom has also ripened. We can start dancing but stay close to the exit…

Original date of Hungarian publication: October 25, 2017

www.zsiday.hu