Timing is everything and you have picked the worst time to sell, a time when the general population is feeling the effects of the austerity measures in combination with the credit crunch. Not only that, but the international investment from UK population is down by 40%.

Perhaps you should try marketing it to regions that are still buying ...... Russian property publication?

Of course the best action would not to sell at all ..... but if you must - you might get lucky - some here might see the potential that Hungary has for the coming years.

Hungary has probably got potential in the long term but why wait when you can get much better returns in most other E European markets.

The apartment is in pest, just opposite Marguerite Island, it's called Riverloft and we have a 2nd floor one bed apartment, the complex is excellent, swimming pool etc and half is in an old mill conversion (not our apartment)

Jo

WHOA ....... big surprise for me today.

Hungarian housing market is underpriced - Portfolio.hu Interview with Benson Elliot chief Mogull
Wednesday, 12, March 2008 08:00:00 AM

UK-based Benson Elliot Capital Management has recently acquired a 60% stake in the Károlyi City Centre project of CEU Reality. Marc Mogull, the head and founder of Benson Elliot, a private equity company investing solely on real estate markets, was in Budapest at the time of the transaction and talked to Portfolio.hu about the Hungarian real estate market, the intimidating state of the local economy, financing crisis and the conquer of private equity in the real estate sector.





Why Hungary?

Portfolio.hu: Why Hungary, why Budapest and why Károlyi City Center?

Mark Mogull: We were not necessarily seeking to invest in Hungary, but equally we were not averse to do so either. This is very important because in certain countries we are in fact reluctant to make investments. So Hungary is a market where we feel comfortable to bring money to and the residential sector is where we have a lot of experience. Currently, the residential sector represents about 40% of our total portfolio. Why this project? I think it has the right concept, the right location and - perhaps above all - the right developer.

Portfolio.hu: Are you not concerned about Hungary's sluggish economic growth? You are also present in Slovakia, so you definitely have a point of reference...

Mark Mogull: It is certainly troubling. We've been monitoring the government's economic reform efforts for some time, in particular the measures to reduce the country's fiscal and current account deficits. These aren't easy issues, but real progress is being made.

As we can see these efforts have a negative impact on short-term growth, but that does not mean that people are going to stop having babies or families are going to stop looking for better quality housing. While the current economic environment does make it harder to find good opportunities on the market [.] It's not one of those markets where you can just buy up everything on offer and look back 12 months from now and feel confident you can make money. However, as I've said, this doesn't mean that you can't find opportunities either.

Benson Elliot
Benson Elliot is one of the pre-eminent private equity real estate firms in Europe. The firm was established in 2005 with the support of a global group of institutional investors. Today, Benson Elliot manages funds on behalf of a diverse group of pension funds, private foundations, endowment funds and high net worth individuals. The firm’s total investment capacity is about EUR 2 billion.

The firm targets investments in the middle market (EUR 25 million to EUR 500 million total transaction volume) across Europe, where an ability to marry sophisticated transaction structuring and financing skills with local market knowledge and hands-on asset management experience can deliver superior overall performance. Investments are made through Benson Elliot Real Estate Partners II, a fully discretionary fund vehicle managed by Benson Elliot.

In 2006, Benson Elliot was named by Private Equity Real Estate as “Emerging Firm of the Year".

This year, Benson Elliot has been short-listed by Financial News for their “European Real Estate Private Equity Firm of the Year" award.

Benson Elliot has investments in France, Germany, Denmark and Spain and is also active in Hungary and Slovakia. The company plans to launch investment services in Italy, Turkey and the United Kingdom already this year.


Portfolio.hu: Why do you think residential real estate prices are lower in Budapest than in most of the CEE capitals?

Mark Mogull: I believe it has to do partly with lower construction costs and lower land values. Another likely factor, I think, was the lack of confidence in the market in recent years.

For whom credit crunch is an opportunity << previous page 2/2

Portfolio.hu: Watching your new investment in Újpest you seem highly confident that prices will increase in Budapest.

Mark Mogull: We are value investors, I prefer buying in a market that is seemingly underpriced. If you look at the peer group, if you look around Europe, it is hard to find markets where you can buy good quality housing for 1,500 euros per square meter.

On the other hand, some believe housing is overpriced in some of the other markets. So the answer isn't simply that the price of residential real estate in Hungary will skyrocket. We think that there are certain markets where housing prices have to adjust downwards. We usually do a very simple analysis on housing. We look at typical housing prices compared to medium incomes. This ratio looks quite attractive in Budapest at the moment.

Portfolio.hu: Investment on the property market has fallen quite significantly as a consequence of the credit crunch. Do you see this as a threat or rather as a correction of the overheated market?

Mark Mogull: We definitely view this as an opportunity. We are very well capitalized. What the credit crisis mostly means for the property market is that some of the unsophisticated money is squeezed out of the system. For us this obviously decreases competition. The last couple of years have been actually tough for us because as value investors we have struggled to find value since the market was overpriced.

Marc Mogull
Mogull began his real estate career in Europe in 1990 as a Director in the European property group at Goldman Sachs, having previously spent four years in acquisitions with Chicago-based JMB Realty Corporation. He has a Bachelor of Science degree in Economics from The Wharton School of the University of Pennsylvania, and a Master of Business Administration from Northwestern University’s J.L. Kellogg Graduate School of Management.

In 1993, Mogull established the property investment and financing unit at the European Bank for Reconstruction and Development (ERD), taking over responsibility for tourism (including hotels) in 1995 and shipping in 1998. As the ERBD’s first Director for Property & Tourism, he led all its activities in these sectors, in 26 countries across Central and Eastern Europe and central Asia.

Prior to founding Benson Elliot, Mogull established and ran the USD 632 million (equity) Doughty Hanson & Co European Real Estate Fund, one of the first and, ultimately, one of the most successful European private equity real estate funds. At Doughty Hanson Marc was responsible for assembling and overseeing a property portfolio ultimately valued at over EUR 3 billion.

Since 2005, Mogull has also served as Vice Chairman of the UK Council of the Urban Land Institute, a nonprofit research and education organization in the development arena. With more than 34,000 members, the ULI facilitates the open exchange of ideas and information among local, national and international real estate industry leaders and policy makers and is dedicated to the responsible use of land and in creating and sustaining thriving communities worldwide.


Portfolio.hu: The role of private equity has definitely been growing in the last 1-2 years. Do expect this trend to continue?

Mark Mogull: I think that the private equity real estate community has demonstrated that it can successfully deploy capital and deliver the returns they promised. You can't argue with that if you look at the numbers.

However, the last years have been good to invest so investors were able to be indiscriminate as to how they deployed their capital at the different private equity funds. The interesting question is that what happens in the next 12-24 months when the performance starts to diverge dramatically amongst the different private equity real estate fund managers.

This means that either some fall away or that some investors will realize that the sector is not bringing superior returns and start to pull back allocations.

We are definitely not seeing that yet. In fact, it is possibly the opposite in the short term. The stronger private equity real estate fund managers right now are finding more demand for allocation for their funds than they did 12 months ago, because the most sophisticated investors understand that if they thought it was a good time to put money in 12 months ago, it's an even better time today.

Right now Europe may be divided into two types of markets: ones that are in correction and ones that are in denial. I think that unfortunately Hungary seems to be closer to the latter one.

========================================================================

The reason I mention this ...... is because this is the SAME development I bought into! I certainly couldnt have hoped for a bigger endorsement for my investment, it really does look like moving forward to phase 2 that the project will get first class treatment in marketing and everything else.

Growth in EU purchasers may mask official drop in foreign flat purchases
Last year, some 5,000 non-Hungarian citizens bought about 4,700 properties in Hungary, nearly half of them in Budapest, according to data from the Ministry of Local Government and Regional Development (Önkormányzati és Területfejlesztési Minisztérium).

While in property terms this is roughly 11% less than a year earlier and a 21% drop over 2004, the year Hungary joined the European Union, the figure does not necessarily reflect a real decline in property purchases by foreigners, as EU-citizens are now eligible under certain conditions to freely buy real estate in Hungary without obtaining a permit.

That Hungary may not be losing appeal among EU property buyers is supported by data available on purchases by non-EU citizens, which went up from 15.8%in 2006 to 20.9% .

German nationals continue to be the biggest buyers of Hungarian property, although their share dropped to 17% from 25% last year. The Irish came second with 12%, slightly less than a year earlier, followed by the Brits, whose share rose by a marked 40%, accounting for 10% of the total.

In terms of location, Budapest is becoming more popular each year. Whereas in 2004 only 17% of the properties were bought in the capital, by 2006 this jumped to nearly 40%.

The large revaluation of the Slovakian koruna's ERM-2 central parity (17.6%) on Thursday pushed the exchange rate to stronger than the previous spot rates. Goldman Sachs analysts said the revaluation creates positive sentiment for the rest of Central European FX, which prompted them to adjust their 3- and 6-month forecasts stronger.

“We are also strengthening our 12-month EUR/HUF forecast (from EUR/HUF 235 to EUR/HUF 225), because the country has been lagging its regional peers in terms of currency appreciation, and a more credible central bank will achieve a stronger currency in the face of high inflation risks," the analysts said in a market analysis published late on Thursday.

“The longer-term lesson of Slovakia's ERM-2 story is that ERM-2 membership, when it comes, is likely to boost FX appreciation: this makes us bullish about the medium-term currency outlook for the region," they added.

---------------------------------

Hungary's currency will eventually catch up to the other countries in the region with regards to currency strength. Just one more reason why Hungary was a great investment a year ago ..... (sorry you guys missed the currency upswing), of course this is just the start. Now add the huge fall in supply throughout this year .... and the cost of development increases = new build price increase. Add in the upcoming tax reductions, and a mirade of other positive effects and it seems to me that Hungary is a good bet despite their short term economic woes.


http: / /ichart .finance .yahoo .com /1y?gbphuf=x

Richard, all your posts simply try to talk up your own positions - holder of gold, seller of a UK property and a purchser in Hungary. Wishing it will happen won't necessarily make it true!

Anyone who posts here posts from their own perspectives, as it happens my perspectives arise from interest in economics and study of where to invest. Wishing it to happen - with regards to my previous post has nothing to do with it.

Just as property secrets marketing a specific development, it is an informed decision whether to buy or not. Property secrets give us their interpretation of the facts / gives us the facts that will sell their property and you have to decide based on the information provided - and from your own research.

The problem is so few people do sufficient research for themselves.

I speak of Hungary because - Yes I am invested there but I also know the market. It is not about wishing ..... its about knowing - conviction in ones beliefs.

Whether you agree with me or not is beside the point. I share my perspective and I would be happy to see others to share their knowledge.

Everybody here has their own vested interests, read - agree or disagree. Dont just dismiss others views but rather consider and respond to the point made.

FACT - HUF is rising against all currencies - 17% so far against the £, and it has a long way to go to catch up the currency appreciation of the surrounding countries.

Im afraid when people disagree with my views - I will consider and if I still disagree and then proven correct ..... then yes I tend to tell them they were wrong.

Feel free to do that with me ...... but then I have yet to be wrong.

Kecskemét, C Hungary, picked for EUR 800 mln Merc plant (3)
Wednesday, 18, June 2008 09:58:00 AM

First mentioned in the press as a potential location only a few days ago, Hungary has been chosen for a new Mercedes plant by the Daimler Group today. The new auto plant, employing 2,500 when fully operational, will be set up Kecskemét, central Hungary, to manufacture the new A and B class models. Daimler is expected to sign a statement of intent with Hungarian government representatives in the next few weeks. The factory is expected to start manufacture in 2012, Prime Minister Ferenc Gyurcsány said in a press conference this morning.

2008.06.18 11:14
How much is Hungary paying to bring Mercedes to Kecskemét?

With its total value of EUR 800 million, the vast project announced this morning is the largest so far in Hungary. Therefore it is not impossible that the news may have played a role in yesterday's 1% strengthening of the Hungarian currency. The trend continued this morning, with the EUR/HUF rate down from 248 yesterday morning to 244 at 10:00 p.m. today.

The background

Until a few days ago, the city of Timisoara, Romania seemed a certain winner; back in the winter, a Romanian newspaper presented the decision as a fact. Among the likely candidates were Poland, and according to certain media sources, Serbia as well.

richard,

it sounds like the government in budapest is getting truly desperate, offering a tax bribe that outweighed romanian and polish auto manufacturing workforce skills and larger local markets.

but i agree with you that the PS FDI monitor seems less than objective. it may be nothing underhand, but merely reflecting where they have established the best sources of information.

regards,
dan