You are correct, the retail spending has slowed significantly - more than predicted by the government. It is entirely a result of the austerity measures. Everyone new 2007 and 2008 would be tough, however I am in Hungary for the long term and buying at the bottom will allow me to refinance and buy a second and then a third whilst prices are still low. I might add that price inflation for new build is still 12 -15%. And rental returns stack up nicely in a country where MINIMUM rental term contracts are 12 months and the law is utterly pro landlord. Retail spending might have slowed, however wage inflation has not - currently about 7% a year. This might not be as big a rise as some in the new EU, however you know the saying ...... slow and steady wins the race (with a few bumps in Hungary's case). Tax cuts are on the way, although interest rates will remain high for somewhat longer, - partly due to the high wage inflation and also due to the cost of food and fuel. Realistically the boom in prices will not occur until late 2008 / 2009 at the earliest - although it does seem the local population know the boom is coming. More and more local people are snapping up the new build property in anticipation of the EMU entry (so my sources in the real estate business tell me). Some would say it is the PERFECT time to buy.