“Nothing is permanent, only change itself” – The ancient wisdom of Heraclitus is more true today than ever before. The so-called “accordion effect,” i.e. a cyclicality, is usually present in economic life, but it has been awhile since we experienced a tremendous upheaval like what 2020 brought about worldwide. The economic impact of the health situation due to COVID-19 now clearly dominates everyday life. In the course of history, of course, it has often happened that, under the influence of certain forces economic markets are closing, opening and narrowing. In such cases both the optimistic and pessimistic attitudes are constantly changing, as we are projecting the global situation to our own lives and seeing what the future looks like.
If we look at the epidemic situation, we have to face constant change, because after a calmer summer we are living in very exciting days again, the virus is spreading fast and we do not see the end, we do not know when everyone will get a vaccine. Since we have been living on a similar roller coaster for more than half a year, this of course has a strong impact on all areas of life.
“The real estate market is one of the biggest stakeholders,” says Ben-Ezra Orran, an expert at Central Home. “For investors, stability and reliability are the two most important keywords. For them, it is important that their real estate investment is an ideal choice in terms of long-term competitiveness compared to other forms of investment. So far, Budapest has been one of the most popular locations for foreign investors in Central Europe, at the regional level, considering the competitiveness of both the real estate portfolio and real estate prices.”
At present, however, economic uncertainties are also affecting this, as secure, stable benchmarks and predictability have faltered.
“In the real estate market in Budapest, for example, there is currently a very big difference of opinion regarding buyers and sellers,” the expert continues. – “There is currently a fundamentally optimistic group of buyers in the market who want to buy a property in a good position. They are ready to take action and are looking for properties with the right parameters. However, in parallel with this customer base, there are sales groups that stick to their ideas in terms of sales aspects, even though market opportunities and conditions have now changed.”
Another type of customer group that is also present in the downtown market is the one that has the opportunity to buy real estate with good quality and parameters at a suitable and good price for them. They are still in a waiting position now, they do not see clearly the future and where the market will move in the coming periods. Undoubtedly, there is also a sales force that actively follows market movements and constantly lowers prices because they see that they have to adapt to the dynamics and needs of moving customer groups if they actually want to sell.
“It’s not easy to make long-term forecasts right now,” says a Central Home expert. “Unfortunately, for now, all that is really certain is that the uncertainty will be here with us for some time to come. We predict that there will now be a few weeks when there will be a lot of movement in the real estate market, but there will also be a drastic decline when the epidemic is at its peak. And distance is also accompanied by a drop in demand. Real estate sales are basically a genre that involves face-to-face encounters, and while we try to deploy online tools, the majority of buyers understandably require a personal presence. My colleagues and I are constantly analyzing the situation and trying to assess downtown real estate market movements on a weekly basis.”