Rapidly rising public debt could lead to the next major crisis - investment expert
One of the most important events at the start of the Portfolio Property Investment Forum 2025 was the discussion entitled 'Macro Panel – In the Shadow of Elections', which explored the economic factors shaping the domestic real estate market.
"We have been saying for three years that the Hungarian economy will pick up, but it is clear that it is not currently achieving the 4–5% growth it has achieved in the past. If we consider our environment and the budget's room for manoeuvre, this becomes apparent. A change of model is needed," said István Madár, senior analyst at Portfolio, at the start of the discussion. Hungarian policymakers have also recognised the need for caution with the forint and the base rate, and for nominal stability.
The question of whether Hungary will be the regional growth leader in the coming period is a big one. According to Viktor Zsiday, a portfolio manager at Hold Fund Management and Citadella Derivative Investment Fund, the real estate market reacts to changes with a slight delay. This has its advantages and disadvantages.
Major crises are truly dangerous because they never originate from the same place as the previous ones.
In his view, the next crisis will be caused by rising government debt in almost every country, which will lead to a rebellion in the bond markets and potentially cause yields to jump.
I wouldn't take out a variable-rate loan right now,
said the expert. However, he softened the severity of his statement by pointing out that
economists had predicted nine of the last five global crises.
As Adorján Salamon, MRICS, CEO of ESTON International, told us, it will take us 5-6 years to catch up with Austria – and we have been saying this for decades.
He believes that the truth lies somewhere between the two scenarios, and that we can explain both the economic boom and the impending crisis. The real estate market is slow to react, and trust, growing GDP, affordable labour, normal credit conditions and a lack of government market stimulation are all extremely important to it.
Worthy investments
According to Viktor Zsiday, it is still worth investing in real assets, as those who invest in nominal assets will sooner or later fail. A lot of money is currently seeking a place in real assets, and such assets will survive the next shock.
However, there is also hope for a recovery. Adorján Salamon said that if the Germans get going, that momentum and capital will reach us within one to two years.
Spring always arrives later in Hungary than in Germany. While the sun is already shining brightly there, the flowers here are just beginning to bloom. Conversely, winter arrives at exactly the same time.
While István Madár confirmed that there will be an upturn in Hungary, it is of course not guaranteed that the region will ever reach the EU's level of development.
Cover photo: Portfolio
