Gábor Futó, founder and co-owner of Futureal Group shared his views on the current interest rate policy, credit and the real estate market in Hungary. In his opinion piece, appeared on a leading financial news site, portfolio.hu, Mr. Futó highlights that in the current global economic situation, Hungary has no other way forward than traditional monetary policy, which aims to bring down inflation in a way that is credible and transparent to international market players. As painful as it is for all of us at the moment, we need high interest rates now.

The lack of an interest rate rise would have turned us into Turkey, would have depressed the forint, would have pushed up inflation further, and would have required even bigger interest rate hikes later to stop the price-wage depreciation spiral.

Energy prices and the crisis are discouraging commercial tenants, covid and hybrid work have reduced office demand, and covid and zoom have reduced demand for hotels. At the same time, high interest rates in the housing market have eliminated credible buyers months ago, leaving only cash buyers. However, the extension of the 5% VAT and the presence of cash buyers may yet keep some strength in the industry. The positive news for buyers is that supply is shrinking more than demand is decreasing, and production costs are rising drastically, so price increases are almost certain, housing investment can provide protection against inflation.

Read the full article on portfolio.hu.