Budapest - One of the worst places to invest?

Hi,

Reading this website and having looked into Budapest myself a fair few times I am of the conclusion that Budapest is a terrible place to invest.

1) Rip off developers - Charging Brits/Irish significantly more 'you make when you buy not when you sell' simply cant apply in Budapest.

2) Poor capital growth currently.

3) Messed up economy.

I know that a lot of people here have a vested interest in the city but can anyone provide a valid reason for investing in Hungary over the likes of Poland or the Czech Republic?

Best reason for buying in Budapest right now? It is out of favour with the "lemmings" who bought everything in sight at inflated prices a couple of years ago. Right now, it is a saner market with better value available to careful investors in the better areas. The less attractive areas should still remain off-limits to investors, despite the dumping of cut priced properties by those same lemmings who are surprised that their money didn't double in a couple of years.

Budapest is a good place to invest; many people confuse "invest" with "buy", and that is the nub of your question. Lots of people made money in Budapest over the last few years. Lots lost money, and quite a few just held their own. That's how it is in the property market, anywhere.

I've invested a lot of research into both Prague and Warsaw and have yet to find the level of investment potential that I've found in Budapest. Most importantly, rental return is the vital part of any investment and in relation to this, Bp continues to outshine the other two capitals. Smaller investors tend to follow the crowd rather than spend time researching markets.

I totally agree with auto320, investor confidence is at a major low - well it was last year, that is just the point- Budapest HAS turned the corner with business and investor and general public confidence in the future = all on the up.

The time to buy is BEFORE those big property investor marketing companies start marketing at the big shows.

Im in this for the long term - to build a portfolio.

Monthly report on the Hungarian economy:

In the first two months of the year the number of people employed in the business sector increased by 1.5%, while in the public sector it declined by 3.5%. The unemployment rate did not change in the first quarter. This is due in part to the really growing job opportunities and favorable weather conditions, but in part to the spreading of the legal employment.

The confidence in the Hungarian economy is growing, the fiscal developments are somewhat better than expected. The cooperation between the government and the central bank has been improving. The forint is steadily strong and - although the inflation is still high - the price increases will slow down significantly from the autumn. All these factors create already now conditions for gradual reduction of interest rates. By the end of the year a 6-6.5% central bank interest rate is probable, while the forint might somewhat weaken amidst certain fluctuations.

I agree with auto myself, during 2002-2003 many foreign "investors" were buying in Budapest without any proper market research and sometime without even going over to have a look on their investment, this is not a clever investment policy, some of them are now trying to sell and finds that the prices are lower them they imagined.
it's irrelevant if you invest in Poland, Czech republic, Croatia or any other location, the real estate market is a long term game, the first people to invest can make a nice profit in a short time (in Budapest from 1998 - 2003 people made 250% - 300% profit), but after the first "wave" is over people needs to investigate, compare prices and be willing to keep on to the property for the long run.
I have no doubts that within the next 5 - 8 years people will see a good profit on their investments in Hungary as long as they are not panicked by every slight movement in the market

lee-m said:

the real estate market is a long term game

Click to expand...

Last week I talked with a person who bought in 1994 an appartment of 120 sqm for 5 million forint (20.000 €) near to Kalvin Tér and sold it this year for 230.000€.

That's what I call a good profit

ringledman said:

Reading this website and having looked into Budapest myself a fair few times I am of the conclusion that Budapest is a terrible place to invest.

Click to expand...

What me disturbs me most about Budapest is the deadly mix of incompetence and arrogance of most local management people.
They are so bad in "managing" stuff; they make mistake after mistake, come with promises they never keep...

Another thing that disturbs me is how the city (especially Pest) is one big dump (streets full of trash & graffiti).

I'm in Atlanta for the moment, and what a difference of mentality.
Everytime I'm here I wonder how they can keep a city so clean (sometimes it's even scary: not one little paper on the streets, no tags on the walls...)
And even more important: people know how to manage a project, problem...

But the crazy thing is: in the end I prefer 100x a city as Budapest than all these okidoki skyscraper cities, because there's always something missing: a heart and a soul!

I was over in Budapest in March this year, - a friend told me of this new scheme to deal with the graffiti ...... lets hope its soon.