NeilIt's useful to read the views of a dispassionate expert on the ground in Budapest. And I think you're dead right on Hungary.The government has clearly made good progress in turning the dire economic state around - and impressed the EU along the way. It's also impressed currency investors, as you noted.But, the situation was so desperate last year (as reflected in the currency in the first three quarters of the year), that any sign that the government was tackling the country's economic woes was bound to drive up confidence. I'd say that currency strength in an emerging economy like Hungary's can be a very fickle indicator of economic strength - or weakness.The fact remains that there is a long, long way to go, AND the efforts needed - which consist of very tough political decisions - to shrink that deficit - still the highest in Europe - become increasingly harder. The really big challenges for Hungary lie ahead - not behind. It still needs to tackle cuts and efficiencies in the politically hyper-sensitive areas of health, pensions and state bureaucracy.The economy hasn't turned the corner yet and, I agree with you, that this means we can't yet see the strong likelihood of the kind of fast economic growth and the consequent high cap growth in the property market that's needed to join the 200% club.The latest EU report on Hungary's progress provided some useful insight on the current state of play.In a generally upbeat report, which praised Hungary's efforts, the EU monetary affairs commissioner, Joaquin Almunia, added a cautionary message, saying that the country's finances were still 'fragile' and the 2009 deadline for coming into line with the EU's stability pact's 3% of GDP limit on fiscal deficit was subject to 'risks and uncertainties'. That's EU speak for 'the jury's still out.'Tellingly, Almunia added that the EU would continue to monitor Hungary closely, especially in the light of its 'past record' of being economical with the truth about the state of its finances. The government did after all lie for years to its people and the EU.The bottom line is - maybe Budapest will turn out to be a winner, but the prospects are far from clear yet. So, why should an investor take the risk when you look at the alternatives?CheersRobin

Guys Well, it seems the summer squeeze on credit is putting the reforms in Hungary at risk. See this very down beat review by the EIU http: / /www .economist .com /daily /news /displaystory .cfm?story _id=9675615 "Hungary, however, is in the midst of an austerity drive that has nearly brought the economy to a standstill. In a region where first-quarter GDP growth averaged around 7%, Hungary’s economy grew by just 2.7%. The flash estimate for the second quarter, at just 1.4% year on year, is even more alarming. In this context, the maintenance of relatively high interest rates at their current level is the last thing the economy needs. Still, this remains a serious risk." So, there is a substantial risk that Hungary's reforms won't bite before the markets do. This doesn't destroy the long term potential of beautiful Budapest. But it does mean it is a wait and see - ie. wait until there is a decent opportunity to buy and any blood spilling is over - and then come into the market on a value basis. Bad news for those already invested - but a potential candidate for investors in 1 to 2 years time? Cheers Neil