Statistics suggest that Budapest property increased in value every year until 2004, then dipped slightly in 2005. but between 2005-2006, it rose again. Otthon Centrum suggest by over 13% for classic apartments. Two other seemingly more independent reports suggest the figure to have been around 7-8%. However, the market is very segmented, with strong demand for good apartments but little or no demand for poor-quality apartments. In addition, exceptional apartments are often sold at a premium.
The political situation has stabilised since last year. Reforms are taking place and the budget deficit will more than likely decrease over the next 2-3 years, to allow for Euro adoption between 2011-2013.
The forint has regained all of its strength since last year's collapse and foreign direct investment continues to be high. However, inflation and interest rates are also high, so local spending power is restricted. The economy is unlikely to grow by very much during the next couple of years.
There are too many properties available for rent at the minute, but not enough of them are high-standard and priced realistically. Most people I know, who live here, would say that it's difficult to find nice apartments for rent in Budapest.
A lot depends on what your brother is looking for out of this investment. With the right property, yields can be high in Budapest, certainly higher than most of the rest of CEE. High capital appreciation is not predicted within the short term, but longer term projections tend to be much more favourable.