Ryan Air are paying particular attention to Budapest at the moment, with several new routes opening up to the UK and also to various other locations throughout EU, most recently announced, - Germany. Investment in the tourism industry and the continual whitening of the economy (19% increase in collected taxes!), reduction in public spending all shine a positive light on the EMU convergence program. Office market is booming! As is the residential market. The development I purchased in - the first phase sold out now - within 5 month. Prices are now 19% higher than when I purchased at launch ... how that will translate into real gain we will have to see. Next few years will see ALOT of apartments built, however I think that this increased supply will be outstripped by increased demand. As more and more international companies take up office space, relocating staff to HU, new residential flats seem to be of particular interest now. Todays headlines "Hungarian households' Swiss franc-denominated loans rise to all-time high in June". Big purchases continue through foreign currency - beating the painful austerity measures. Not everything is rosey though ... retail sector is having a tough year - not likely to improve significantly for next year. This is of course entirely due to the austerity measures taken by the government. From now, until EMU entry I see gradual improvements in all facets of the HU economy, whilst the reverse is true here in the UK. I see nothing but pain in the UK as interest rates continue to rise and the subprime situation deteriorates, and as businesses find it increasingly difficult to raise finance, increasing unemployment and general unwinding of UK debt burden are the order of the day. Very good time to be in the debt consolidation market in UK, - for the next few years at least.

Richard couldn't disagree but surely there are many better places to invest currently? Huw

Perhaps there are more popular places to invest (I would not say better places), however I am not a sheep and do not like following the herd. When the marketing machines of companies such as property secrets finally refocus on Hungary I will reap the benefits. I bought my 2 bed apartment for 80k Euros 5 months ago, when investor confidence was rock bottom (it has since bounced back after several years of falls). It is now worth 96k Euro (end of first phase of the development). It will not be completed until December 2008 - (20 month development), by then I expect the economy to be well into a growth phase.

Some real figures about my experience so far in Budapest; Apartment purchased for 29m huf late 2005. Apartment completed in April of this year and 70% of payment made. Tenant has just moved in for 900 euros a month. Developer is selling identical apartment 2 floors down for 40m huf (appreciate this may not indicate the real gain, but it's as good an analysis as anything else I have seen here). Market for tenants is tough, had to add air-con and Ikea furnishing will not do. The apartment is fitted-out to a high standard and there are £5k of furnishings to include in any calculations. Like Richard I agree that Budapest is not to be discounted.

The problem I found with budapest is that there seems to be two prices there. One for the locals and one for us with a good 20% difference between the two.

There is a two price system and it is very annoying, - however if you have a good agent (like I have) you can get the local price.

Hi Richard, I am currently living in Budapest and looking to purchase a property, can you give me the name of your good agent please?

Hungary slips in Euromoney country risk ranking, still scores well Monday, October 1, 2007 10:50:00 AM Hungary has slipped back in the latest country risk poll conducted by Euromoney, but remained in the upper quadrant of the list comprising 185 countries. In the rankings for Eastern Europe (22 countries) Hungary came in third behind Slovenia and the Czech Republic. The twice-yearly Euromoney country risk assessment uses analytical indicators, credit indicators and market indicators, in nine categories, namely Political risk (25% weighting), Economic performance (25%), Debt indicators (10%), Debt in default or rescheduled debt (10%), Credit ratings (10%), Access to bank finance (5%), Access to short-term finance (5%), Access to international capital markets (5%) and forfeiting (5%). Hungary ranks 43rd, down from the 41st place in the previous report. Slovenia still tops the ranking in the region, but has also slipped to the 26th position from the 25th. Hungary remained on the third place behind Slovenia and the Czech Republic among EU members in CEE, followed by Poland (44th on the global ranking), Estonia (45th), Slovakia (46th) and Latvia (48th). Lithuania is now ranked 50th on the global list, down from the 49th place six months ago. Luxembourg once again snatched the first place on the global country risk ranking, obtaining 99.59 points of the 100 possible. The runner-ups were Norway, Switzerland and Denmark. The United States came in 7th in September, down from the 4th place in March, over concerns relating to sub-prime mortgages in the US. Euromoney expects sub-prime woes to keep suffocating the US financial and residential housing markets for over a year, and projects major correction on the markets.

If USA is so high I would suggest this isn't much of a guide for current investors!

Moody's director says Hungary embarked on reforms at the right time
Wednesday, 16, January 2008 05:07:00 PM

Hungary started its reforms at the right time and if global liquidity does tighten considerably, it could find itself in a better position, although it cannot entirely bar itself from its impacts, Pierre Cailleteau, director of ratings agency Moody's, told Hungarian newswire MTI on the sideline of a conference in Vienna.

Talking at a conference of Euromoney on Tuesday, Cailleteau said that the fiscal adjustment measures have reduced Hungary's dependence on foreign financing, the large part of which is made up by foreign direct investments, and this decreased the country's vulnerability.

The director noted that Moody's based its assumption on the probable scenario that while there will be a downturn in the US economy, no recession or stagflation should be expected. Under such a brighter scenario, the emerging economies of Central and Eastern Europe could be able to sit out the slum - thanks to their favourable situation - without major shocks and their growth could remain robust, even around 5%.

If the US economy, however, falls into a deeper and more sustained slump - and it will become clear in the next six months whether this will happen or not - countries in the CEE region, Hungary included, could also find themselves in a difficult situation because of capital outflows, Cailleteau added.

"Taking all things into considering, it is my opinion that the CEE countries will be able to handle the bad effects of the slowdown in US economic growth," he said.


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Hungarian cenbank chief Simor sees no second-round CPI effects yet - agency
Wednesday, 16, January 2008 04:05:00 PM

Hungarian central bank (NBH) Governor András Simor has said on Wednesday he does not see climbing inflation expectations, despite rising consumer prices and still considers the bank's medium-term CPI target as achievable in 2009. He has also said economic growth will pick up from now on.

“We see no second-round inflation effects from higher food prices as of yet...we are hopeful of reaching price stability in 2009," Dow Jones Newswires cited Simor as saying in a lecture at a Euromoney conference in Vienna.

Hungarian inflation accelerated for the third consecutive month in December, hitting 7.4% on the year, against analysts' expectations for a rate of 7.25% in a poll by Portfolio.hu (and 7.2% in a poll by Dow Jones). The NBH has for a long time stuck to its objective to cut CPI to 3%, which it also considers the level of price stability.

While the government's fiscal adjustment measures first introduced in the autumn of 2006 left a scar on growth, the NBH believes a pick-up is ahead, Simor said.

Simor noted that the vulnerability of the Hungarian economy has diminished “very significantly" as a result of the government steps, both on the fiscal side and regarding the current account deficit.

“With the inflow of European Union funds, Hungary's external financing requirement will go down to 3%-4% (of GDP)," the news agency cited Simor as saying.

He believes the “real question is" whether Hungary can improve its competitiveness “and how fast can we improve it to catch up with our neighbours".

Simor said Hungary's economic slowdown has "most likely" bottomed out. (GDP growth was a staggeringly small 0.9% yr/yr and 0.3% q/q in July-September 2007. The Q2 "growth" figure was revised to zero from +0.1% q/q.)

Means to boost growth lie in the reform of social welfare payments, raising employment and changing the tax system, Simor said.

"If these measures are carried out, economic growth will accelerate faster," he added.